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How Econ Textbooks Sanitize the Horrors of Communism

When I was first learning economics, I was surprised by how pro-communist many economics textbooks were. I don't mean, of course, that any economics textbook ever said, "Communism is good." What I mean, rather, is that textbooks were very positive relative to communism's historical record. Indeed, many seemed deeply ignorant of actual communism, basing their assessment on second-hand information about communists' stated intentions, plus a few anecdotes about inefficiencies. Many textbook authors were, in a phrase, communist dupes: Non-communists who believe and spread a radically overoptimistic image of communism. Read the full thing

What Are the World’s Three Biggest Problems?

Are you a serious thinker? Then self-consciously change the subject to the Big Picture.What can be done to mitigate the media's policy misdirection? I suggest we start the New Year with what I call the Priority Resolution. Are you a serious thinker? Then step back from the media cycle and name the world's Three Biggest Problems. Instead of trying to score points over the latest exciting story with colorful characters, let us self-consciously change the subject to the Big Picture. Read the full thing

Tariffs, Pickpockets, and the Nationalist Snake in the Moral Grass

Protectionism, as it is misleadingly known, has always been an insider’s game, a political gambit aimed at enriching those to whom the government is especially beholden or seeks to seduce at the expense of other people. Incumbent producers who produce products on which tariffs are imposed succeed in repelling competition by force of the government’s customs officers, which is to say that they succeed in increasing their profits by force, not by offering consumers a better deal. Read the full thing

Do Two Wrong Taxes Make a Right?

Imposing tariffs in order to protect domestic producers who are unjustly harmed by taxes or regulations, as Bastiat noted, simply shifts the harm done by these taxes and regulations from producers to consumers. But why should consumers rather than producers suffer this harm? Some people must suffer it, and it’ll be either the unjustly taxed and regulated producers (in the case of no protective tariff) or their consumers (in the case of a protective tariff). Read the full thing

Why Black Market Entrepreneurs Matter to the World Economy

In his book, "Stealth of Nations: The Global Rise of the Informal Economy," Neuwirth points out that small, illegal, off-the-books businesses collectively account for trillions of dollars in commerce and employ fully half the world’s workers. Further, he says, these enterprises are critical sources of entrepreneurialism, innovation, and self-reliance. And the globe’s gray and black markets have grown during the international recession, adding jobs, increasing sales, and improving the lives of hundreds of millions. It’s time, Neuwirth says, for the developed world to wake up to what those who are working in the shadows of globalization have to offer. Read the full thing

Imports Create Jobs and Trade Deficits Don’t Matter

It is no good objection to reply that America’s current-account (or “trade”) deficit means that foreigners don’t buy from us as much as we buy from foreigners. First, the investments in America made by foreigners (and that increase the U.S. trade deficit) also typically involve demand for U.S. inputs, including workers. When, for example, Ikea builds a store in Dale City, Virginia, American workers and other input suppliers are employed in that project. Read the full thing