Showing posts with label Division of Labour. Show all posts
Showing posts with label Division of Labour. Show all posts

Wednesday, 11 March 2026

Thank you Adam Smith

It's a busy week. This week also marks the 250th anniversary of Adam Smith's Wealth of Nations, the first in-depth exploration and explanation of (in PJ O'Rourke's words) why some nations are prosperous and wealthy and other places just suck.In honour of the anniversary, here are several of Adam Smith’s most insightful observations:

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages. [The Wealth Of Nations, Book I, Chapter II]
It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people. [The Wealth Of Nations, Book I, Chapter I]
Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things. [Lecture in 1755, quoted in Dugald Stewart, Account Of The Life And Writings Of Adam Smith LLD, Section IV, 25]
It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. [The Wealth Of Nations, Book IV Chapter I]
By means of glasses, hotbeds, and hotwalls, very good grapes can be raised in Scotland, and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries. Would it be a reasonable law to prohibit the importation of all foreign wines, merely to encourage the making of claret and burgundy in Scotland? [The Wealth Of Nations, Book IV, Chapter II]
Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. [The Wealth Of Nations, Book IV Chapter VIII]
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices…. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary. [The Wealth Of Nations, Book IV Chapter VIII]
To widen the market and to narrow the competition, is always the interest of the dealers…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution... It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it. [The Wealth Of Nations, Book I, Chapter XI]
It is the highest impertinence and presumption… in kings and ministers, to pretend to watch over the economy of private people, and to restrain their expense... They are themselves always, and without any exception, the greatest spendthrifts in the society. [The Wealth Of Nations, Book II, Chapter III]
There is no art which one government sooner learns of another than that of draining money from the pockets of the people. [The Wealth Of Nations, Book V Chapter II Part II] 
Every individual... neither intends to promote the public interest, nor knows how much he is promoting it... he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
    Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.
[The Wealth Of Nations, Book IV, Chapter II]
What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. [The Wealth Of Nations, Book I Chapter VIII]
Mercy to the guilty is cruelty to the innocent. [From his 1759 work, The Theory of Moral Sentiments]
The man of system…is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it… He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it. [The Theory Of Moral Sentiments, Part VI, Section II, Chapter II]





Thursday, 25 December 2025

"...the secular meaning of Christmas"

"A few years ago, I spent some time thinking about the meaning of Christmas. I am afraid I shocked my Christian neighbours when they realised I was looking for the secular meaning of Christmas, not the story of the baby in the manger. I think there is a wider, nonreligious meaning to the holiday, which I thought I would share....

"People are a value.

"This is important. ... [W]e have an amazing standard of living. And we have it because of the millions of people — in our country and around the world — who are putting in a small, medium, or large effort to create values in the world. Some of these values are products or services we happily buy because they make our lives easier, or more productive, or more meaningful, or more enjoyable. Some of these values they just put out into the world, such as their funny cat videos or 'how to' videos for the gadget you just purchased and can’t get to work.

"So, I see Christmas as a time to celebrate the good in the people around you and in the world. To be grateful for the best within them and to recognise the value of that to you."
~ Jean Moroney from her post 'Goodwill to Man' [hat tip Gus Van Horn]

Friday, 25 July 2025

The crucial - and unappreciated - function of wealth in an industrial economy

 

“A widespread ignorance of a crucial economic issue is apparent in most discussions of today’s problems: it is ignorance on the part of the public, evasion on the part of most economists, and crude demagoguery on the part of certain politicians. The issue is the function of wealth in an industrial economy

"Most people seem to believe that wealth is primarily an object of consumption—that the rich spend all or most of their money on personal luxury. Even if this were true, it would be their inalienable right—but it does not happen to be true. The percentage of income which men spend on consumption stands in inverse ratio to the amount of their wealth. The percentage which the rich spend on personal consumption is so small that it is of no significance to a country’s economy. The money of the rich is invested in production; it is an indispensable part of the stock seed that makes production possible. ...

"In view of what they hear from the experts, the people cannot be blamed for their ignorance and their helpless confusion. If an average housewife struggles with her incomprehensibly shrinking budget and sees a tycoon in a resplendent limousine, she might well think that just one of his diamond cuff links would solve all her problems. She has no way of knowing that if all the personal luxuries of all the tycoons were expropriated, it would not feed her family — and millions of other, similar families — for one week; and that the entire country would starve on the first morning of the week to follow . . . . How would she know it, if all the voices she hears are telling her that we must soak the rich?

“No one tells her that higher taxes imposed on the rich (and the semi-rich) will not come out of their consumption expenditures, but out of their investment capital (i.e., their savings); that such taxes will mean less investment, i.e., less production, fewer jobs, higher prices for scarcer goods; and that by the time the rich have to lower their standard of living, hers will be gone, along with her savings and her husband’s job — and no power in the world (no economic power) will be able to revive the dead industries (there will be no such power left).”
~ Ayn Rand, from her 1974 article 'The Inverted Moral Priorities,' collected in The Voice of Reason 

Saturday, 14 June 2025

Let’s call ‘taxing the rich’ what it really is: Theft

Picture of New Zealand's richest man. Guaranteed a reaction
 against his success by a certain sort of commentator ...

EVERY SO OFTEN A PIECE of dross comes over my monitor that just cries out to be fisked. Like this rant against the latest NBR Rich List by someone called Dr Neal Curtis. His piece argues that "as society groans under the weight of wealth inequality" (can you hear the groans, readers?) there should be a "different slogan to ‘tax the rich'." The one he favours: "reclaim the wealth'."

Yes, he's an ultra-redistributionist. Aka, a thief. Walter Williams knows the type:

Dr Curtis's piece is of course a reaction to publication of the NBR Rich List, which without fail gets a certain sort of person to hyperventilate.

Dr Curtis is that sort of person.

And this screed vomiting forth at Newsroom is the result.

Dr Curtis, by the way, is said by his bio to be "a comics scholar and critical theorist with wide-ranging interests." Lead item on his Areas of Expertise is: Comics. So let's just call him Mr Curtis.

MR CURTIS BGINS: THIS Government, he says, is "gutting government departments and cutting public services."

I wish this were true instead of comical. (Spending is now higher under Nicola Willis than under Grant Robertson. Full-time employees under the Luxon Government was 64,222 when elected, and is now 63,238. There have been cuts, it's true, but none anywhere near as big as I would hope.)

But his beginning is only a drive-by to pass off his credentials. Three paragraphs in we get to the meat. So it's here that I'll begin my fisking.

MR CURTIS: [There are] three central assumptions of current economic dogma that those who question are branded as ‘radical leftists.’ These assumptions are underpinned by the beliefs that wealth trickles down; deregulation is good for business; and the state should stay out of the market and everything should be privatised.

Should I cry "strawman" this early in the piece? Each of these pieces of alleged dogma is both fly-blown and overblown. No-one outside a piss-poor public-choice lecture would anyone say everything should be privatised. (Courts? Police? Army?) And no-one anywhere advocates so-called "trickle-down." His point here is not to make sense, however, it's simply to damn the rich so he can later advocate their being eaten.

So he ploughs on regardless, challenging each of the assertions he's just straw-manned. Like his logic, let's looks at each of them in reverse.

MR CURTIS: ...the state has always been an economic entrepreneur funding all kinds of technological innovation, such as the internet, but this often goes unreported in the dominant economic journalism.

"Always" is doing a lot of work here. There's a reason so much government entrepreneurialism goes unreported in any economic journalism: it's because it's so rare. Sure, the government defence project ARPANET linking dozens of people was transformed into something that now links five billion. But that wasn't a Ministry of Doing Shit that did that. It was private entrepreneurs who turned the great idea into a GREAT IDEA. 

MR CURTIS: ... seen from a purely corporate perspective deregulation is no doubt a path to profit. However, it is also socially disastrous as costs of deregulation are outsourced via public bailouts following financial crises, for example, that are directly caused by the rolling back of legislation designed to safeguard the wider economy.

Without going too much further than this one paragraph (though we can if you wish), let us agree that there is more than one kind of deregulation. There is the kind that mandates safety and (may) safeguard the wider economy. There is regulation that protects intellectual and real property, and that allows for the enforcement of contracts. And then there is regulation about how curved a banana should be, or how far apart hairdressing salon seats should be. You'll notice how carefully Mr Curtis conflates these. And why.

MR CURTIS: ... wealth, especially when given away in tax cuts, does not trickle down. It stays at the top. Ever-increasing wealth inequality as measured by the Gini coefficient or any study of income trends show this.

Now, it's Mr Curtis who insists this to be economic dogma, i.e., that wealth "trickles down." Yet the author of Basic Economics,  Thomas Sowell, insists that there is no-one anywhere outside a lunatic asylum or a comics convention who holds it to be true, let alone as dogma.
Years ago [writes Sowell, I] challenged anybody to quote any economist outside of an insane asylum who had ever advocated this “trickle-down” theory. Some readers said that somebody said that somebody else had advocated a “trickle-down” policy. They could never name that somebody else and quote them, though.

[Mr Curtis] is by no means the first [person] to denounce this nonexistent theory. Back in 2008, presidential candidate Barack Obama attacked what he called “an economic philosophy” that “says we should give more and more to those with the most and hope that prosperity trickles down to everyone else.”

Let’s do something completely unexpected: Let’s stop and think. Why would anyone advocate that we “give” something to A in hopes that it would trickle down to B? Why in the world would any sane person not give it to B and cut out the middleman? All this is moot, however, because there was no trickle-down theory about giving something to anybody in the first place. 

Sowell wrote a whole book exposing the nonsense of those who believe this trickle-down fantasy. [It's free, you can DOWNLOAD IT HERE.] And as I've pointed out myself on occasion, if there is a trickle-down system in operation it's the one whereby large gobs of your own money are taken from you by government, and trickled back down to you in the form of favours, and subsidies and social welfare for working families and the like.

There is an argument however for having capitalists keep their own capital, however— an economic argument, as well as the strictly-speaking moral argument that it's their goddamn money. Mr Curtis et al would like to think that if the "one percent's" capital were not stripped from them it would perhaps be baked into pies or used to light cigars—or would be emptied into money bins so that, like Scrooge McDuck, the owner of capital can spend his time rolling around in it.

This is truly a comic-book version of reality that only one ignorant of the division of labour could hold. 

Because, as George Reisman explains,  the vast majority of the wealth owned by the so-called “one-percent” is not held in the form of chocolate bars or champagne bottles or pies, but in the form of the capital goods and equipment that produce the consumer goods on which we (and Mr Curtis) all depend—capital goods that only come to represent wealth to the extent they are used to produce the goods and services people, in their capacity as consumers, really want. Per-Olof Samuelsson observes
"The productive rich (think Rockefeller, Carnegie, Ford, Bill Gates, Steve Jobs, etcetera, etcetera) actually flood the rest of us with wealth (and themselves become wealthy in the process). Taxing or expropriating them simply means to dam this flood. And this may make it appear 'trickle-down'— because governments and politicians will only allow a small portion of this wealth to trickle down to us; the rest of it lands in their own pockets."
Many of the wealthiest people on earth hold their wealth in the form of a financial asset, like stock in a successful company. And the very wealthiest have no time to swim in cartoon-style money bins because they're also successfully running these companies.
[Mr Curtis and his readers] have no awareness of this, because they see the world through an intellectual lens that is inappropriate to life under capitalism and its market economy. They see a world, still present in some places, and present everywhere a few centuries ago, of self-sufficient farm families, each producing for its own consumption and having no essential connection to markets.
    In such a world, if one sees a farmer’s field, or his barn, or plough, or draft animals, and asks who do these means of production serve, the answer is the farmer and his family, and no one else. In such a world, apart from the receipt of occasional charity from the owners, those who are not owners of means of production cannot benefit from means of production unless and until they themselves somehow become owners of means of production. They cannot benefit from other people’s means of production except by inheriting them or by seizing them.
But in the modern world (at least, to the extent that the so-called “one-percent” are not simply milking government subsidies and bailouts, which is how so many seem to think business should work), all of us benefit from the private ownership of their means of production whoever owns them—just as long as the owners are left free to produce and innovate. We all get the benefit of their production, both as buyers of the products of those means of production, but also as sellers of labour employed to work with those means of production.
The wealth of the capitalists, in other words, is the source both of the supply of products that non-owners of the means of production buy and of the demand for the labour that non-owners of the means of production sell. It follows that the larger the number and greater the wealth of the capitalists, the greater is both the supply of products and the demand for labor, and thus the lower are prices and the higher are wages, i.e., the higher is the standard of living of everyone. Nothing is more to the self-interest of the average person than to live in a society that is filled with multi-billionaire capitalists and their corporations, all busy using their vast wealth to produce the products he buys and to compete for the labour he sells.
    Nevertheless, the world [
Mr Curtis and his readers] yearn for is a world from which the billionaire capitalists and their corporations have been banished, replaced by small, poor producers, who would not be significantly richer than they themselves are, which is to say, impoverished. They expect that in a world of such producers, producers who lack the capital required to produce very much of anything, let alone carry on the mass production of the technologically advanced products of modern capitalism, they will somehow be economically better off than they are now. Obviously, [they] could not be more deluded.

AND IT'S NOW, WITH HIS three dogmas exposed, that we can see Mr Curtis's error more plainly. Like many who are branded as "radical leftists," not only is there an inherent wish to damn the rich, all of them, there is also a paucity of understanding of how the deserving rich got that way. 

Yes, there is more than one way to get rich. One may pull favours and subsidies from government, as cronies all try to, or one may be the government and sell Shitcoins (as one particularly egregious entity is currently doing). Or one may sit tight and rely on central banks inflating monetary assets (what is often called the Cantillon Effect, after the eighteenth-century ex-banker who called attention to this phenomenon of long-term capital consumption). But neither of those examples is any more than short-term, and no amount of short-term skimming is going to get you to the top of even a New Zealand rich list.

Even in this small pond, it does take an entrepreneur risking his or her own capital to really roll in the big returns.

Mr Curtis would like you to conflate all three, as he proceeds to draw his conclusion.

But first, his corollary: that it is government spending that makes us all rich. Mr Curtis phrases it this way.

MR CURTIS: All this [leaving capital in the hands of its owners] results in top-heavy, financially starved economies as governments continually try to make the wealth giveaways fit into a budget by stripping support for public services or selling off public assets at knockdown prices. ...
    The fact that the global economic outlook as well as specific national economies remain so fragile and unstable ... is surely enough evidence that the principle of continually moving wealth upwards doesn’t work...

He really does think that money in the hands of government grows economies, whereas money in the hands of those who made it simply squanders it. 

It's deluded.

And sure enough, having made his three points of alleged dogma, and delivered his corollary, he gets to start eating his meat. 

MR CURTIS: Just as there is no economic justification for structuring an economy in which only the very wealthy are the true beneficiaries, there is also no moral justification.... As our society is placed under increased stresses and strains beneath the extreme weight of amassed, socially useless wealth that sits with a very small class of people, there have been increased calls to tax the rich.
Mr Curtis is, of course, in favour. And now, bringing together what passes for his argument, is his payoff:
MR CURTIS: Instead of a call to ‘tax the rich’, the call should be to ‘reclaim the wealth’. I believe this phrase more adequately represents the request to return a greater share of what was commonly created. It is also a call to give back even just a small amount of what was taken through the design of an economy knowingly and carefully organised to purposefully benefit the few.

You can see his own dogma peering out from under his comical version of how an economic system works:

"Commonly created."

"Give back."

"Reclaim."

One question should be enough to puncture the deceit, and with it we return to Walter Williams at the top of this post. The question is: Who created this wealth?

Nick Mowbray is an almost perfect example here. 

The wealth represented by Mr Mowbray's Zuru Toys quite literally did not exist before Mr Mowbray created Zuru's toys. Pre-Mowbray, there was a pile of stuff. Post-Mowbray and his identification of the value to human beings to be delivered by his toys, there's enough value in them to make him this county's richest man.

I know that can be hard to get your head around, but there it is. Value, in the economic sense, is in the eye of the consumer. Consumers' "vote" every day, with their own hard-earned money on their devices, for Zuru's toys creates a socially-objective price for Mr Mowbray's offerings, and allows him to grow his capital. Which he can then use to create more toys, which creates more capital, which .....

All going well, especially if you like children's toys, that's a life-enhancing spiral that costs no-one else anything.

LET'S NOT BOTHER TOO MUCH to investigate further into the mind of someone who would despise that.

Let's ask instead only what they're trying to achieve. For. Mr Curtis, here's his payoff here, he hopes (now with an added noteto identify his errors:

MR CURTIS: As our society is placed under increased stresses and strains beneath the extreme weight of amassed, socially useless wealth [sic] that sits with a very small class of people, there have been increased calls to tax the rich.

I love the use of the passive verb: "there have been calls..." instead of "I and my colleagues have been demanding..." 

MR CURTIS: In keeping with the dogma [sic], conservative supporters have made tax a dirty word [I wish! -Ed.]. Rather than tax being an individual or corporate contribution to the maintenance of a functioning society, the corporatist right has over the past four decades tried to make it a synonym for theft [I wish - Ed.]. The idea that taxing the rich is really a form of theft also makes it easy for the dogmatists [sic] to present the call as a form of envy; a petty resentment of the successful.
And isn't it envy? Envy, for example, that one person making toys that delight people will earn more in his lifetime than someone with pretensions to intelligence making his living from analysing comic books and posting snide articles on a web page. The envy fair oozes out this piece, and other similar rants by the usual suspects.
MR CURTIS: Instead of a call to ‘tax the rich’, the call should be to ‘reclaim the wealth.

Ah. Here we go: an all-but explicit claim from the mire that "you didn't build that." Which in the next sentence is made explicit:

MR CURTIS: I believe this phrase more adequately represents the request to return a greater share of what was commonly created.

So, in what will no doubt be a surprise to Messrs Mowbray, Hart et al, everybody created the toys for which the world is clamouring, the companies made more efficient, the plastics that store food better, the films that folk queue up for ... We all did it, he claims.

In the end, after all the verbage, that's his major claim. That we made it—an absurdity—so therefore we should keep it. A nonsense.

It is also a call to give back [sic] even just a small amount of what was taken [sic] through the design of an economy knowingly and carefully organised to purposefully benefit the few.
The irony is that, if Mr Curtis lifted his head from his comic books and looked properly at the world around him and at the division-of-labour system that allows even sad sacks like himself to survive and even flourish, he'd understand that (even imperfectly) it already is benefitting all of us.

If there's one benefit of watching a US president tearing down everything that made his own country prosperous, it's that his many political enemies are slowly discovering this truth.  

Many are discovering anew that it is actually poverty that is mankind’s natural state, that it is past wealth production (not redistribution) that has been rescuing people from poverty worldwide in ever-expanding numbers—the great (but almost unheard) story of our era that allows today's worker more easily-available health, wealth, and luxuries than even a king enjoyed in all previous centuries—and that efforts to simply legislate higher wages by law amounts to little more than a “loot and plunder” approach to economics.

The fundamental policy tools of statist politicians [explains George Reisman] are clubs, guns, and prisons... What allows statist politicians to conceal the fact that they’re thugs is the belief that they have a special account with Santa Claus. As though Santa Claus, rather than extortion, were the source of the funds extorted by the politicians.
The statist politicians and the leftist “intellectuals” dismiss the teachings of sound economics by calling it “trickle down.” They do not allow themselves to see that their theory of economics is the loot and plunder theory.
Some have realised and reconsidered. I invite Mr Curtis to consider it too.

PS: Mr and Mrs Marx were at least fully aware of how envy towards the rich is a psychological problem, not an philosophical—or economic—one. Writing to their "embittered" son after yet another tantrum at the world, Heinrich Marx said:
Frankly speaking, my dear Karl, I do not like this modern word, which all weaklings use to cloak their feelings when they quarrel with the world because they do not possess, without labour or trouble, well-furnished palaces with vast sums of money and elegant carriages. This embitterment disgusts me and you are the last person from whom I would expect it. What grounds can you have for it? Has not everything smiled on you ever since your cradle? Has not nature endowed you with magnificent talents? Have not your parents lavished affection on you? Have you ever up to now been unable to satisfy your reasonable wishes? And have you not carried away in the most incomprehensible fashion the heart of a girl whom thousands envy you? Yet the first untoward event, the first disappointed wish, evokes embitterment! Is that strength? Is that a manly character?

Is it? 

Sunday, 4 May 2025

Cities As Centres Of Innovation: Lessons From Edinburgh And Paris

Examining the places where major advances happened is one way to learn about the conditions that foster societal flourishing, human achievement, and prosperity.

Amidst the turmoil of modern times, evidence reveals significant progress across various metrics, from rising life expectancy to declining global poverty. Throughout history, cities have emerged as epicentres of innovation and progress, fostering collaboration, competition, and freedom of thought.

By exploring the unique environments of cities like Edinburgh and Paris, where intellectual liberty thrived, Chelsea Follett uncovers in this guest post the vital role of peace, freedom, and population density in driving human achievement and societal advancement.


Cities As Centres Of Innovation: Lessons From Edinburgh And Paris
by Chelsea Follett

HAS HUMANITY MADE PROGRESS? WITH so many serious problems, it is easy to get the impression that our species is hopeless. Many people view history as one long tale of decay and degeneration since some lost, idealised golden age.

But there has been much remarkable, measurable improvement—from rising life expectancy and literacy rates to declining global poverty. (Explore the evidence for yourself). Today, material abundance is more widespread than our ancestors could have dreamed. And there has been moral progress too. Slavery and torture, once widely accepted, are today almost universally reviled.

Where did all this progress come from? Certain places, at certain times in history, have contributed disproportionately to progress and innovation. Change is a constant, but progress is not. Studying the past may hold the secret to fostering innovation in the present. To that end, I wrote a book titled Centers of Progress: 40 Cities that Changed the World, exploring the places that shaped modern life.

The origin-points of the ideas, discoveries, and inventions that built the modern world were far from evenly or randomly dispersed throughout the globe. Instead, they tended to emerge from cities, even in time periods when most of the human population lived in rural areas. In fact, even before anything that could be called a city by modern standards existed, progress originated from the closest equivalents that did exist at the time. 

Why is that?

“Cities, the dense agglomerations that dot the globe, have been engines of innovation since Plato and Socrates bickered in an Athenian marketplace,” urban economist Edward Glaeser opined in his book The Triumph of the City. Of course, he was hardly the first to observe that positive change often emanates from cities. As Adam Smith noted in 1776, “the commerce and manufactures of cities, instead of being the effect, have been the cause and occasion of the improvement and cultivation of the country.”

One of the reasons that progress tends to emerge from cities is, simply, people. Wherever more people gather together to “truck, barter, and exchange,” in Smith’s words, that increases their potential to engage in productive exchange, discussion, debate, collaboration, and competition with each other. Cities’ higher populations allow for a finer division of labour, more specialisation, and greater efficiencies in production. Not to mention, a multiplication of knowledge — more minds working together to solve problems. As the writer Matt Ridley notes in the foreword he kindly wrote for Centers of Progress, “Progress is a team sport, not an individual pursuit. It is a collaborative, collective thing, done between brains more than inside them.”

A higher population is sufficient to explain why progress often emerges from cities, but, of course, not all cities become major innovation centres. Progress may be a team sport, but why do certain cities seem to provide ideal playing conditions, and not others?

That brings us to the next thing that most centres of progress share, besides being relatively populous: peace. That makes sense, because if a place is plagued by violence and discord then it is hard for the people there to focus on anything other than survival, and there is little incentive to be productive since any wealth is likely to be looted or destroyed. Smith recognised this truth, and noted that cities, historically, sometimes offered more security from violence than the countryside:
Order and good government, and along with them the liberty and security of individuals, were in this manner established in cities, at a time when the occupiers of land in the country, were exposed to every sort of violence. But men in this defenceless state naturally content themselves with their necessary subsistence; because, to acquire more, might only tempt the injustice of their oppressors. On the contrary, when they are secure of enjoying the fruits of their industry, they naturally exert it to better their condition, and to acquire not only the necessaries, but the conveniencies and elegancies of life. That industry, therefore, which aims at something more than necessary subsistence, was established in cities long before it was commonly practised by the occupiers of land in the country. […] Whatever stock, therefore, accumulated in the hands of the industrious part of the inhabitants of the country, naturally took refuge in cities, as the only sanctuaries in which it could be secure to the person that acquired it.
OF COURSE, NOT ALL CITIES WERE are peaceful. Consider Smith’s own city: Edinburgh. At times, the city was far from stable. But the relatively unkempt and inhospitable locale emerged from a century of instability to take the world by storm. Scotland in the 18th century had just undergone decades of political and economic turmoil. Disruption was caused by the House of Orange’s ousting of the House of Stuart, the Jacobite Rebellions, the failed and costly colonial Darien Scheme, famine, and the 1707 Union of Scotland and England. It was only after things settled down and the city came to enjoy a period of relative peace and stability that Edinburgh rose to reach its potential. Edinburgh was an improbable centre of progress. But Edinburgh proves what people can accomplish, given the right conditions.

During the Scottish Enlightenment centred in Edinburgh, Adam Smith was far from the only innovative thinker in the city. Edinburgh’s ability to cultivate innovators in every arena of human achievement, from the arts to the sciences, seemed almost magical.

Edinburgh gave the world so many groundbreaking artists that the French writer Voltaire opined in 1762 that “today it is from Scotland that we get rules of taste in all the arts, from epic poetry to gardening.” Edinburgh gave humanity artistic pioneers from the novelist Sir Walter Scott, often called the father of the historical novel, to the architect Robert Adam who, together with his brother James, developed the “Adam style,” which evolved into the so‐​called “Federal style” in the United States after Independence.

And then there were the scientists. Thomas Jefferson, in 1789, wrote, “So far as science is concerned, no place in the world can pretend to competition with Edinburgh.” The Edinburger geologist James Hutton developed many of the fundamental principles of his discipline. The chemist and physicist Joseph Black, who studied at the University of Edinburgh, discovered carbon dioxide, magnesium, and the important thermodynamic concepts of latent heat and specific heat. The anatomist Alexander Monro Secondus became the first person to detail the human lymphatic system. Sir James Young Simpson, admitted to the University of Edinburgh at the young age of fourteen, went on to develop chloroform anesthesia.

Two of the greatest gifts that Edinburgh gave humanity were empiricism and economics. The influential philosopher David Hume was among the early advocates of empiricism and is sometimes called the father of philosophical skepticism. [Not such an unalloyed boon - Ed.] And by creating the field of economics, Smith helped humanity to think about policies that enhance prosperity. Those policies, including free trade and economic freedom that Smith advocated, have since helped to raise living standards to heights that would be unimaginable to Smith and his contemporaries.

That brings us to the last but by no means least secret ingredient of progress. Freedom. Centres of progress during their creative peak tend to be relatively free and open for their era. That makes sense because simply having a large population is not going to lead to progress if that population lacks the freedom to experiment, to debate new propositions, and to work together for their mutual benefit. Perhaps the biggest reason why cities produce so much progress is that city dwellers have often enjoyed more freedom than their rural counterparts. Medieval serfs fleeing feudal lands to gain freedom in cities inspired the German saying “stadtluft macht frei” (city air makes you free).

That adage referred to laws granting serfs liberty after a year and a day of urban residency. But the phrase arguably has a wider application. Cities have often served as havens of freedom for innovators and anyone stifled by the stricter norms and more limited choices common in smaller communities. Edinburgh was notable for its atmosphere of intellectual freedom, allowing thinkers to debate a wide diversity of controversial ideas in its many reading societies and pubs.

Of course, cities are not always free. Authoritarian states sometimes see laxer enforcement of their draconian laws in remote areas, and Smith himself viewed rural life as in some ways less encumbered by constraining rules and regulations than city life. But as philosophy professor Kyle Swan previously noted for Adam Smith Works:
Without denying the charms and attractions Smith highlights in country living, let’s not forget what’s on offer in our cities: a significantly broader range of choices! Diverse restaurants and untold many other services and recreations, groups of people who like the same peculiar things that you like, and those with similar backgrounds and interests and activities to pursue with them — cities are (positive) freedom enhancing.
The same secret ingredients of progress—people, peace, and freedom—that helped Edinburgh to flourish during Smith’s day can be observed again and again throughout history in the places that became key centres of innovation. Consider Paris.

AS THE CAPITAL OF FRANCE, Paris attracted a large population and became an important economic and cultural hub. But it was an unusual spirit of freedom that allowed the city to make its greatest contributions to human progress. Much like the reading societies and pubs of Smith’s Edinburgh, the salons and coffeehouses of 18th‐​century Paris provided a place for intellectual discourse where the philosophes birthed the so‐​called Age of Enlightenment.

The Enlightenment was a movement that promoted the values of reason, evidence‐​based knowledge, free inquiry, individual liberty, humanism, limited government, and the separation of church and state. In Parisian salons, nobles and other wealthy financiers intermingled with artists, writers, and philosophers seeking financial patronage and opportunities to discuss and disseminate their work. The gatherings gave controversial philosophers, who would have been denied the intellectual freedom to explore their ideas elsewhere, the liberty to develop their thoughts.

Influential Parisian and Paris‐ based thinkers of the period included the Baron de Montesquieu, who advocated the then‐​groundbreaking idea of the separation of government powers and the writer Denis Diderot, the creator of the first general‐​purpose encyclopaedia, as well the Genevan expat Jean‐​Jacques Rousseau. While sometimes [rightly - Ed.] considered a counter‐​Enlightenment figure because of his skepticism of modern commercial society and romanticised view of primitive existence, Rousseau also helped to spread skepticism toward monarchy and the idea that kings had a “divine right” to rule over others.

The salons were famous for sophisticated conversations and intense debates; however, it was letter‐​writing that gave the philosophes’ ideas a wide reach. A community of intellectuals that spanned much of the Western world—known as the Republic of Letters—increasingly engaged in the exchanges of ideas that began in Parisian salons. Thus, the Enlightenment movement based in Paris helped spur similar radical experiments in thought elsewhere, including the Scottish Enlightenment in Edinburgh. Smith’s many exchanges of ideas with the people of Paris, including during his 1766 visit to the city when he dined with Diderot and other luminaries, proved pivotal to his own intellectual development.

And then there was Voltaire, sometimes called the single most influential figure of the Enlightenment. Although Parisian by birth, Voltaire spent relatively little time in Paris because of frequent exiles occasioned by the ire of French authorities. Voltaire’s time hiding out in London, for example, enabled him to translate the works of the political philosopher and “father of liberalism” John Locke, as well as the English mathematician and physicist Isaac Newton. While Voltaire’s critiques of existing institutions and norms pushed the boundaries of acceptable discourse beyond even what would be tolerated in Paris, his Parisian upbringing and education likely helped to cultivate the devotion to freethinking that would come to define his life.

By allowing for an unusual degree of intellectual liberty and providing a home base for the Enlightenment and the far‐​ranging Republic of Letters, Paris helped spread new ideas that would ultimately give rise to new forms of government—including modern liberal democracy.

Surveying the cities, such as Edinburgh and Paris, that built the modern world reveals that when people live in peace and freedom, their potential to bring about positive change increases. Examining the places where major advances happened is one way to learn about the conditions that foster societal flourishing, human achievement, and prosperity. I hope that you will consider joining me on a journey through the book’s pages to some of history’s greatest centres of progress, and that doing so sparks many intelligent discussions, debates, and inquiries in the Smithian tradition about the causes of progress and wealth.

* * * *

Chelsea Follett is the managing editor of HumanProgress.org, a policy analyst in the Cato Institute’s Center for Global Liberty and Prosperity, and author of the book Centers of Progress: 40 Cities That Changed the World (2023).
Find her on Twitter at @Chellivia.
Her article previously appeared at Adam Smith Works, and the Cato at Liberty blog.



Friday, 2 May 2025

CUE CARD ECONOMICS: Economic Harmonies, and The Miracle of Breakfast

FRENCH EXISTENTIALIST PHILOSOPHER Jean Paul Sartre famously stated “Hell is other people,” and he wrote many books attempting to prove it. 

Unfortunately, all he proved to most readers was that Hell is reading Jean Paul Sartre books.

A century earlier his countryman Frederic Bastiat discovered, argued and helped to prove something very different; that other people are the very opposite of hell. Said Bastiat in his own magnum opus Economic Harmonies:

“All men’s impulses, when motivated by legitimate self-interest, fall into a harmonious social pattern.”

This is the big lesson that economics can give to philosophers: that the world is not made up of the “fundamental antagonisms” between people that some philosophers find everywhere; antagonisms alleged to be ...

    Between the property owner and the worker.
    Between capital and labour.
    Between the common people and the bourgeoisie.
    Between agriculture and industry.
    Between the farmer and the city-dweller.
    Between the native-born and the foreigner.
    Between the producer and the consumer.
    Between civilization and the social order.

And, to sum it all up in a single phrase:

    Between personal liberty and a harmonious social order.

What economics can teach philosophers (and what Bastiat can still teach economists) is that other human beings need neither be a burden nor a threat, neither a hell nor a horror but a blessing.

This is the greatest lesson economics can teach: that in a society making peaceful cooperation possible we each gain from the existence of others.

What a great story to tell!

TO START TO TELL THIS long story, a story that all of economics really serves to show, let’s begin with a short story—an excerpt, from a short story by a great short story writer: O. Henry. As his characters sit down in their wilds to break their fast with something “composed of fried bacon and a yellowish edifice that proved up something between pound cake and flexible sandstone,” they begin to reflect on The Perfect Breakfast:

image

Such a breakfast, they sigh, might only be possible in New York. "It's a great town for epicures,” they say. As is virtually every city.  We take for granted now that in virtually every cafe in every city in the country we can sit down to the perfect breakfast. We reach over to Brazil or Kenya for our coffee and down to Christchurch for our mushrooms and rolls; to Pokeno, or Vermont, for our bacon and head further down to the Waikato to dig a slice of butter out of a Te Rapa urn and then turn over a beehive near a manuka patch in Nelson for our honey.

This is the Miracle of Breakfast: that we can eat like the gods for the cost only of a few dollars thanks to the freedom to trade, the division of labour and the 'invisible hand' of the market. And we take this for granted.  We take it so much for granted that, rather than celebrate sharing the meal that gods eat on Olympia, we complain if our eggs are too cold.

And we don’t need long arms to enjoy it: we need the arms and minds of other people who are free to produce, free to trade, free to enjoy the fruits of their own labour by trading those fruits with others.

This is the lesson integrated by all of economics:  that when you remove force and fraud people are a blessing rather than a curse. Thanks be to the freedom to trade, the division of labour and the 'invisible hand' of the market that makes it possible.

This is the great lesson of Economic Harmonies hinted at by Adam Smith, made explicit by our friend Frederic Bastiat, and developed in specific areas by the likes of Friedrich Hayek and Ludwig Von Mises. Bastiat first noticed it in a visit to Paris. Paris gets fed, he observed, yet no-one celebrates the miracle:

image

A light we term self-interest. It is this, says Bastiat, that is at the root of all the Harmonies.

Think about it. On our own we can produce barely anything in a single day.  If we were to permanently endure self-sufficiency or life in the wilds not only would the meal of ambrosia perpetually elude us, our lives would be one long round of much labour for very little reward.  (That's the point of Robinson Crusoe if you remember.) We need others to keep us supplied as we now take for granted—with food, with drink, with iPods, iPads and the very roofs over our head—but how to enlist those others in our aid? Simple: we rely on trading with those others. On voluntary cooperation. In short, we offer them their own profit in return for ours. 

We appeal, in short, to their own self-interest, a point made by Adam Smith in the part of his famous book where he invokes his most famous metaphor:

image

And so we do. By pursuing our own self-interest, through our production, our trade, our enterprise, we ensure “Paris gets fed.”

But there is no central planner here. That is the second part of this miracle: the “resourceful and secret power that governs the amazing regularity of such complicated movements” is not the result of government planning but the opposite: it is a naturally developed “spontaneous order” regulated by this “inner light” of self-interest and the power of free exchange.  That power, that light,  “is so illuminating, so constant, and so penetrating, when it is left free of every hindrance” it produces the order we take so much for granted.

image

This, Bastiat’s great lesson of spontaneous order, was taken up by Friedrich Hayek, observing society relies on the spontaneous order arising out of our voluntary cooperation.

image

This great miracle can only happen when each of us is free to follow our own road, to make use of our unique knowledge and circumstances to pursue our self-interests,  so promoting that of the society more effectually than when we really intend to promote it.

imageSO WHAT EXPLAINS THIS Miracle of Breakfast then? Bastiat’s own conclusion is summed up in three points:

  • Free exchange
  • Self-interest
  • Spontaneous order

Or in one idea:

“That the legitimate interests of mankind are essentially harmonious.”

This, then, is the great lesson integrated by economics, if we are willing to hear it:

Mind you, it takes all of economics to prove the point. And most philosophers are unable to read, or integrate, that much. 

But so too are so many of today’s economists.

* * * * 

* Reposted from 2012, based on a post from 2005. The title comes from a lecture by the late John Ridpath.

Wednesday, 23 April 2025

'The Moral Case for Globalisation'


"THE TERM TYPICALLY USED to denote advocates of globalisation is 'globalists,' which has emerged primarily as a term of abuse, especially on the far right. 'There is no more left and right [says one]. The real cleavage is between the patriots and the globalists.' ...

"[T]his essay’s definition of globalisation is the relatively free movement of people, things, money, and ideas across natural or political borders. .... A consequence of increasing globalisation is an increasingly integrated and complex global system of production and exchange. ...

"There is a vast amount of evidence that documents the impact of reducing barriers to trade, travel, and other forms of exchange across borders. Much of it is presented in other essays in this series, such as Johan Norberg’s 'Globalisation: A Race to the Bottom—or to the Top?' Contrary to some critics of globalisation, the results have been spectacularly positive for the world’s poor, as wages have increased, jobs have become safer, and the use of children for labor has plummeted. Increasing wealth, in turn, is strongly connected to improving health, and the global spread of improvements in medicines and technologies has improved health outcomes even in regions that have not participated as much in the exchange of goods. ...

"People agree to exchange because they expect to be better off by exchanging than by not exchanging. Making it possible to exchange with more people is beneficial to those whose range of potential exchange partners has increased. Adam Smith titled the third chapter of his 'An Inquiry into the Nature and Causes of the Wealth of Nations' “That the Division of Labour is Limited by the Extent of the Market,” a thesis that he illustrated by demonstrating the greater prosperity and progress in the ancient world for those nations with proximity to the sea and to navigable rivers. Due to the lower friction of transportation over water compared to land, that proximity facilitated exchange with much larger areas and with many, many more people. To the extent that policies of governments erect barriers to exchange, it is analogous to making transportation deliberately more difficult, which would generally be understood to be harmful to the vast majority of people. ...

"Globalisation is not limited to the exchange of goods and services across borders; it also encompasses the exchange of ideas, as well as scientific, economic, artistic, and other forms of cooperation. ...

"Ever since Plato’s assault on the open society, critics of globalisation have tended to view cultural innovation and exchange as a pure loss rather than as the emergence of new forms of human life that increase the available store of possible human understandings and experiences. ...

"PEACE AND HARMONY ARE consequences of trade.

Cultural exchange is foundational to living cultures. Pasta, for which Italian cuisine is famous, has origins in Asia, whether it was brought to Italy by Marco Polo, as folklore tells, or earlier, and the tomatoes that form the base of many Italian sauces are cultivated from plants brought from Meso-America by Spaniards. Food has been globalised for millennia, but somehow that has not stopped it from developing an amazing diversity of identifiable cuisines, styles, and dishes with many distinctive characteristics. The same can be said of architecture, traditions, mores, religions, and every other element of human culture. ...

"The key to such peace is not merely the movement of goods and services across borders but voluntary exchange. ... Freedom to trade refers to the voluntary transfers of goods and services and not to state trafficking in tanks and missiles, the sale of products of forced labour (such as the products of Uyghur labourers imprisoned by the Chinese Communist Party), or the sale of nationalised products (such as the oil and gas resources that were confiscated by Putin). Exchange and transfers organised by conquest are mutually impoverishing, as Adam Smith demonstrated of the British Empire ...

"SINCE PLATO'S TIME, OPPONENTS of globalisation have sought to protect established orders from the voluntary choices of those who live in them. Increasing the opportunities for exchange, cooperation, communication, and travel is enriching for the majority, although it may threaten the hold on power of the rulers. Some prefer war over peace, because 'making bigger profits in peace' is worse than war. Reasonable people should think before embracing such attacks on globalisation ...

"Rigorous thinking and empirical research refute, one by one, attacks on globalisation in the name of morality. The world is better when barriers to free and voluntary cooperation are reduced. The world is better because of globalisation."

~ Tom Palmer from his article 'The Moral Case for Globalisation'

Wednesday, 9 April 2025

AI: The Human Advantage: Cooperation > Intelligence


"As someone who follows AI developments with interest (though I’m not a technical expert), I had an insight about AI safety that might be worth considering. It struck me that we might be overlooking something fundamental about what makes humans special and what might make AI risky.

"The Human Advantage: Cooperation > Intelligence
  • Humans dominate not because we’re individually smartest, but because we cooperate at unprecedented scales [ It's called division or specialisation of labor. ...To somehow prevent AI from practicing division of labour would be to make AI inefficient]
  • Our evolutionary advantage is social coordination, not just raw processing power
  • This suggests AI alignment should focus on cooperation capabilities, not just intelligence alignment
"The Hidden Risk: AI-to-AI Coordination
  • The real danger may not be a single superintelligent AI, but multiple AI systems coordinating without human oversight
  • AIs cooperating with each other could potentially bypass human control mechanisms
  • This could represent a blind spot in current safety approaches that focus on individual systems
"A Possible Solution: Social Technologies for AI
  • We could develop “social technologies” for AI – equivalent to the norms, values, institutions, and incentive systems that enable human society that promote and prioritise humans
  • Example: Design AI systems with deeply embedded preferences for human interaction over AI interaction; or with small, unpredictable variations in how they interpret instructions from other AIs but not from humans
  • This creates a natural dependency on human mediation for complex coordination, similar to how translation challenges keep diplomats relevant"
~ Jack Skidmore from his email to Tyler Cowen on Coordination & AI Safety

Tuesday, 8 April 2025

"Tariffs Aren’t Liberating": Your Tuesday Tariffs Ramble [UPDATED]

UPDATE: Some more great links here curated by Don Boudreaux, to help you put this calamity on context.

Since it's the topic of the day a historic turning point in human affairs, the least I can do is offer readers a ramble around the topic of tariffs and the destruction of tariff wars — basically, around the many writers reciting the multiplicity of ways in which the Trump Administration has fucked us.

"“Liberation Day”: That is what US President Donald Trump has called Wednesday, April 2, the day he announced huge swaths of taxes on imports worldwide. Despite the label, it was far from a day of liberation. By making imports to the US more expensive, the government is actively increasing the cost of living for American consumers.
    "The Trump administration has fallen for one of the most common misconceptions about trade—that it only benefits a country when it is the exporter. This could not be further from the truth. One of the greatest benefits of free trade lies with the importing country, where consumers gain access to a huge range of goods, crucially, at lower prices.
    "Whether it’s clothes, food, medical supplies, or mobile phones, access to the global market reduces the cost of living and increases consumer choice, often alleviating poverty in the process.
    "It comes down to a very simple principle. No one person could produce everything he or she consumes. No family or household could do so either. No city, town, or province could produce absolutely everything they consume. Equally, no country can produce everything it consumes, nor should it. Attempts to achieve autarky are acts of economic self-harm. Freedom to exchange across borders is win-win: it allows consumers to access a plethora of goods and services, improving welfare overall."
Tariffs Aren’t Liberating - Reem Ibrahim, FOUNDATION FOR ECONOMIC EDUCATION

"Tariffs are irrational both morally and practically.
    "Morally, tariffs are rights violations - they restrain or prohibit individuals from trading freely and voluntarily in their own self-interest with whomever - no matter where they reside geographically. ...
    "Practically, tariffs punish the individuals in the country which implements them. Trump even acknowledges the pain. But he mystically thinks this pain will be good and lead us to prosperity.
    "Tariffs raise prices, cause shortages, and decrease productivity. They destroy wealth, businesses, income, and jobs. This is well known in theory and practice. See the Smoot-Hawley Act and its role in making the Great Depression even worse.
    "Trump’s foreign policy is morally and practically irrational.
    "What is the moral and practical foreign policy solution?
    "Free trade."
          ~ Andy Clarkson

"The essence of capitalism's foreign policy is free trade—i.e., the abolition of trade barriers, of protective tariffs, of special privileges—the opening of the world's trade routes to free international exchange and competition among the private citizens of all countries dealing directly with one another."
The Roots of War - Ayn Rand, ARI CAMPUS


"Fundamental to the argument for high tariffs has been the argument that trade deficits reflect America being "exploited" or "taken advantage of." In this article of mine on, "Why Trade Deficits Don't Matter -- Unless Caused by Government," I explain the misguided economic reasoning behind this claim, and why the far better policy is free trade."
Trade Deficits Don’t Matter – Unless Caused by Government - Richard Ebeling, FUTURE OF FREEEDOM FOUNDATION

"Donald Trump is fond of saying that trade wars are easy to win. Among the litany of patently false Trumpisms, this may well prove one of the most disastrous. ...
    "Protective tariffs risk triggering a cycle of escalation that ends well for no one."
No One Wins a Trade War - William Bernstein, THE ATLANTIC

"America can’t be outcompeted because America does not produce or trade anything.
     "Nations do not compete with nations. Individual firms compete with individual firms abroad. Ford competes with Toyota. America does not compete with Japan. Nations are trading partners, not competitors."
Why America can't be outcompeted - Harry Binswanger, HARRY'S SUBSTACK




"“We are seeing a combination of true-believing mercantilism, shocking ignorance about how the global economy works, and shocking incompetence in the planning and execution of economic policy,” says Michael Strain."
Trump's aggressive push to roll back globalisation -FINANCIAL TIMES (paywall0

"Like the post-1945 British Labour governments, he wants to shelter domestic manufacturing and the working class behind tariffs while reducing overseas commitments. But the net result will be both economically damaging and geopolitically weakening. Americans will come to miss globalism and policing the world. They will belatedly realise that there is no portal through which the United States can return to the 1950s, much less the 1900s. And the principal beneficiary of Project Minecraft will not be Russia, but China. Call it Project Manchuria. ... 
"The president stands as much chance of reindustrialising the U.S. as you do of getting your frozen laptop to work by smashing the motherboard with a Minecraft hammer."
Trump’s Tariffs and the End of American Empire - Niall Ferguson, THE FREE PRESS

"So think of it as a world wide Brexit like the U.S. leaving the global economy.
    "A trade lawyer at a global law firm here in London told me their clients see Trump’s tariffs as “worse than Brexit” as they’re dealing with rapidly changing trade rules on a massive scale. It’s not just the tariffs that Trump has imposed, but the retaliation it will provoke."
‘How Ugly Is This Going to Be?’ - Graham Lanktree, POLITICO


"It sounds so sensible: why not use protection and industrial policy to preserve manufacturing capacity “just in case” of, say, a war or a pandemic? And, to be sure, this is a better argument for some limited government intervention on trade and investment flows than wanting to tax imported bananas or revive manufacturing.
    "But even then it’s not the slam dunk some people imagine. Below is my chapter on this issue from Economics In One Virus, published in 2021. It’s just as true and relevant today."

"The populist story of the death of U.S. manufacturing is nonsense. Mr. Vance and his cohort maintain that increased free trade with countries such as China in 2000 or Mexico in 1994 killed American jobs. It’s true that the number of manufacturing jobs is lower than it was in 1970. But that’s because we can make so much more with fewer people. Blame technology, not trade.
    "Real hourly output per manufacturing employee has been on an upward trend since 1959. Real U.S. manufacturing value-added—the sector’s contribution to gross domestic product—reached its highest recorded level in 2022. Manufacturing output was close to its all-time high in 2022, and the U.S. remained the global leader in manufacturing value-added per worker.
    "Steel is one example. In 1980, one steelworker could produce 0.083 tons of steel in one hour. By 2018, one steelworker could produce 1.67 tons in an hour. This is a good thing. Wage and income data in the U.S. show the rising tide is lifting all boats—especially the smallest.
    "Americans don’t want their children to have to work punishing jobs in a steel mill, and it’s evident they don’t have to. Manufacturing jobs, as a share of total employment, have been on a downward trend since 1943—falling from 39% to under 25% by the end of 1970 and hitting 20% in 1980. This decline started long before Ronald Reagan ran for office, before China received Most Favored Nation status for outsourcing manufacturing, before Bill Clinton signed the North American Free Trade Agreement and before the World Trade Organization was created. The trends even started five years before the U.S. joined the General Agreement on Tariffs and Trade."
Free Trade Didn’t Kill the Middle Class - Norbert J. Michel, WALL STREET JOURNAL
“The philosophy of protectionism is a philosophy of war.”
          ~ Ludwig von Mises
"“When it comes to steel, it’s fantastic for our industry,” said Jack Maskil [president of the United Steelworkers Local 2227 in Pittsburgh’s Mon Valley], “but what about everything else?” ...
    "On the one hand, they are thrilled that their industry will be a key beneficiary of the 25 percent tariff imposed on steel imports to the U.S. ...
    "But while the steelworkers are also hoping that tariffs will bring about a revival of manufacturing jobs, they also worry about their effect on the economy, and on their own purchasing power."

"President Trump’s ‘Liberation Day’ tariffs risk domino effect across the globe as Chinese goods look for new markets."


"The proponents of protectionism say, “Free trade is fine in theory but it must be reciprocal. We cannot open our markets to foreign products if foreigners close their markets to us.” China, they argue, to use their favorite whipping boy, “keeps her vast internal market for the private domain of Chinese industry but then pushes her products into the U.S. market and complains when we try to prevent this unfair tactic.”
    "The argument sounds reasonable. It is, in fact, utter nonsense. Exports are the cost of trade, imports the return from trade, not the other way around."


"This idea that Donald Trump is just playing hardball to negotiate tariff rates down on US exports is absolutely ridiculous. The % of tariffs applied to US-produced goods has declined consistently since WW2 and was nearly nothing...
    "UNTIL! Donald's first term, and now his second.
    "And yet I keep seeing so many MAGA supporters saying: 'We're already seeing countries backing down from their tariffs!'
    "You're literally winning a battle and losing the war at the same time ..."

"Then there’s Trump’s fascination with tariffs. The damage Trump has caused Ukraine and Nato pales by comparison to what his tariffs will do to America’s economy and the entire international economic system. If Trump had acted on April 1 instead of 2, he could quickly have said it was all an April Fool’s Day joke, thereby saving the global economy trillions of dollars of damage when markets started heading south. Unfortunately however, Trump is totally serious, a fact evident long before “Liberation Day.”
    "Here too, “experts” and anxious businesspeople steadfastly ignored Trump labelling “tariff” the dictionary’s most beautiful word. Tariffs, they said, will be targeted, carefully calibrated, and he’ll do deals quickly. It’s all a bargaining tactic, Treasury Secretary Bessent said in October, 2024: “escalate to de-escalate”. Even as global stock markets drop like rocks, experts are still rationalising what his “strategy” is.
    "Wrong again. Trump is more likely to win the Nobel Prize for literature than for peace."
I worked for Donald Trump. This is the key to understanding him: It’s not about America, and there’s no connection to the real world - John Bolton, TELEGRAPH (UK)
"Reminder: This policy was spearheaded and implemented by a man who thinks nobody says the word “groceries” these days because “it’s an old-fashioned word” and he somehow brought it back into the limelight.
    "Donald Trump is a motherfucking moron. Those who knew this and voted for him anyway because he gave them explicit license to be assholes deserve every last bit of pain his policies will cause them."
          ~ Stephen T. Stone
"In times of upheaval, those closest to power often find ways to turn disruption into wealth. Trump’s erratic tariff wars, billed as economic nationalism, upended markets, collapsed sectors, and triggered retaliatory shocks. But while farmers went bankrupt and consumers paid more, the market opened space for those with foresight—or insider access—to buy low and consolidate.
    "Geographer David Harvey calls this accumulation by dispossession: crisis used not to correct the system, but to extract from it. Devalue public assets. Destabilise protections. Create just enough chaos to buy cheap what others are forced to abandon. It’s not just policy failure—it’s extraction dressed as populism.
    "The con isn’t just psychological. It’s material. It’s not just about being lied to—it’s about being looted.
    "And that’s what makes this moment different—and more dangerous. The scam isn’t happening outside the system. It’s running through it."


"The latest rumor, when I started drafting this column, was that President Trump will suspend the tariffs for a 90-day period, with the exception of those on China. Markets started going back up again.
    "But “the very latest information” doesn’t stay current for long these days. The new report—but don’t count on it—is that the 90-day pause is not real after all. That revision came out before this draft was finished. And markets again whipsawed.
    "The Trump administration has created a new monster—one of unpredictability and erratic behavior. We simply cannot predict with any degree of accuracy what will happen next. By the time you are reading this article, there will probably be some newer report about the tariffs or threat of tariffs, and then another report after that.
    "Even if the White House winds up instituting a pause on the proposed tariffs—or ultimately adopts much better economic policies—this seesawing may plunge the American and perhaps also the global economy into recession."
A Contagion of Uncertainty - Tyler Cowen, THE FREE PRESS


[WATCH] Singapore must be clear-eyed about dangers ahead: Singapore's Prime Minister Wong on implications of US tariffs:

"Donald Trump has demonstrated his profound misunderstanding of the basic economic principles of international trade for several years now, and perhaps reached a pinnacle when he told the New York Daily News in an interview last August that “we’re getting hosed by the Chinese — and that we’ve done it with our eyes wide shut.” ...
    "[Trump adviser] Peter Navarro, in his Wall Street Journal opinion piece earlier this week (see related post here) demonstrated his fundamental misunderstanding of international trade when he opened his op-ed with the following question: “Do trade deficits matter?” Just to ask the question is to admit one’s ignorance of trade theory, which has been pretty settled on this topic since Adam Smith taught us in 1776 that “Nothing…can be more absurd than this whole doctrine of the balance of trade. ..."

Tariffs are a suicide bomb":

Trump's team said they based their "reciprocal tariff" calculation for each country based on the tariffs and impediments put on American imports by those countries. But no. It's even more irrational: "[Trump's chart] features an estimate of 'Tariffs Charged to the USA' by other countries that nobody could figure out, until a financial journalist realised it was just how much we export to that country, minus how much we import, divided by how much we import."



"Under a system of perfectly free commerce, each country naturally devotes its capital and labour to such employments as are most beneficial to each. This pursuit of individual advantage is admirably connected with the universal good of the whole. By stimulating industry, by regarding ingenuity, and by using most efficaciously the peculiar powers bestowed by nature, it distributes labour most effectively and most economically: while, by increasing the general mass of productions, it diffuses general benefit, and binds together by one common tie of interest and intercourse, the universal society of nations throughout the civilised world."
        ~ David Ricardo (1817)




"Why is today’s Trump so different from the Trump of his first term? .. ". Turns out, the answer is very simple" Back then he had people, and a Congress who would say "No." But now the yes men are in power.

Trump's tariffs policy came from his economic advisor Peter Navarro, who invented a fake expert in his books to justify it. "Peter Navarro liked to quote a guy named Ron Vara in his books. Those books are largely what led to Navarro becoming a top adviser to President Trump and helping to shape U.S. policy on China. Here’s the thing about Ron Vara, though: He doesn’t exist. ...
"Ron Vara is an anagram of Navarro."
Trump's China Muse Has an Imaginary Friend - Tom Bartlett, CHRONICLE OF HIGHER EDUCATION


 

Second-term Trump is who Trump always was. This is Trump without many adults in the room stopping him getting his way. This is Trump surronded by Yes Men in a cult. This is Trump. A freedom-hating, dictator-loving, trade-despising child who wants the power of a tryant. Someone who has no regard for facts and who will utter any lie he wishes - no matter how ridicolous it is. And his believers are expected to believe it. Under fear of discommunication from the cult.
This is what you asked for when you voted for Trump. This is what you got. I hope you are happy....
          ~ Dwayne Davies

"An often forgotten truth is that it is not just military warfare that can cause injury to innocent bystanders, the same inescapably happens in economic warfare initiated by governments, as well. But in the latter case the human “collateral damage” is a targetted victim. ...
    "Tariffs and counter-tariffs are tools of economic warfare that are said to be targeting the “aggressor” country. But the very nature of how tariffs and counter-tariffs work, results in the main targets being innocent bystanders in the countries concerned.
    "Once we disaggregate “nations” into their, respective, individual buyers and sellers, producers and consumers, we see that the most damage falls on the economic “non-combatants,” of whatever the original “dispute” may be about ..."
Trump’s Economic Warfare Targets Innocent Bystanders - Richard Ebeling, FUTURE OF FREEDOM FOUNDATION

"TikTok is a major bargaining chip in a grave geopolitical struggle. Given the data users have always sent to Beijing, it’s been a bargaining chip ever since it arrived on America’s digital shores. For Trump, though, it’s not exactly his chip to bargain with: Congress already determined the American course of action. The mystery is why nobody seems to mind Trump delaying its execution — or at least, why nobody is complaining publicly....
    "Trump’s motives here are not difficult to parse, and the bill in question is legitimately problematic. He’s popular on TikTok, and close to one of the company’s major investors. ...
    "As fallout continued from his tariff bombshell — including the legitimacy of his emergency authority to implement the new rates — barely anyone batted an eye at TikTok getting another dubious bailout."
Why Trump keeps saving TikTok - Emily Jashinsky, UNHERD

"Since my last essay on the crisis of democracy, the assaults on democratic checks and balances have escalated. Without agreement from Congress, Trump’s DOGE shut down the U.S. Agency for International Development with stunning speed. Although a federal court blocked further implementation, ruling that the action “likely violated the Constitution,” by then the agency had already been gutted and largely dismantled along with many other agenices. Then, in an alarming politicisation of the military high command, Trump fired the Chairman of the Joint Chiefs of Staff, the Chief of Naval Operations, the Air Force Vice Chief of Staff, and the judge advocates general (the highest-ranking legal authorities) for the Army, Navy, and Air Force.
    "Pressing his claim to imperial power, Trump has moved to assert absolute control over all federal regulatory bodies, including the Securities and Exchange Commission, the Federal Trade Commission, and the Federal Communications Commission. This not only hobbles their capacity to act independently in the public interest but opens the door to massive corruption. As DOGE seizes control of more and more of the government’s most sensitive and highly centralised stores of data, the conflicts of interest proliferate for its chief 'overseer,' Elon Musk, who over the years has received 'at least $38 billion in government contracts, loans, subsidies and tax credits.' And Just Security has documented an 'alarming' pattern of 'politicisation and weaponisation of the Department of Justice since Trump has retaken office.
    "The United States now faces the grave and imminent danger of its democracy decaying into a 'competitive authoritarianism'.”





"We have to realise that Trump is not joking about any of this. He’s not joking about invading Greenland, and he’s not joking about running for a third term. He’s as serious about all of this as he was about the tariffs. The evidence indicates that he will do it all, whatever he can get away with. ...
"While we prepare a mass movement—and Donald Trump crashing the economy with the world’s stupidest tariffs will help us a great deal—we need to fight everything. What that will specifically mean is that we have to fight a lot of losing battles. ...
"There are five reasons to fight early and often, no matter the odds of winning any one fight.
    1. It lays down a marker. ....
    2. It mobilises others to fight. ....
    3. It delays and exhausts the strongman. ...
    4. Sometimes you win. ...
    5. You find out what works and who fights. ...."
How to Fight Back - Robert Tracinski, TRACINSKI LETTER