Wealthy people and great entrepreneurs aren’t going to not start that great business because they will pay more taxes if they make it big. Either way, if successful, they would have done something great and will be rich.
The most profitable and flexible workforce for Americans is illegal immigrants.
When we put tariffs on China, we are saying every country on Earth can get low inputs from China except America, making American business less competitive.
“Basically, the feds impose damaging new taxes and trade restrictions on farmers for reasons mostly related to ideology and rent-seeking, then undo their effects by making farmers more dependent on government largesse. Often lost in the discussion, but one reason that U.S. farmers are so dependent on selling commodity crops to China and elsewhere is that past policies essentially subsidized them to do so.
Like with all things political, various federal farm policies have created a series of odd bedfellows. Many environmental groups have lauded past farm bills because they provide incentives for farmers to set aside land as open space, but overall the federal meddling has harmed the environment. For instance, federal sugar subsidies have greatly diminished the Florida Everglades by encouraging the conversion of wetlands into sugar fields.”
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“All these policies drive up food prices for non-farmers and reduce our choices in meats and produce.”
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“Instead of creating this convoluted, counterproductive policy that mimics a Rube Goldberg farce, the government should do the basics to help farmers. It should scuttle tariffs, halt subsidies, eliminate costly shipping levies, create a guest-worker program so farmers can have a consistent labor source, lower taxes, bolster water infrastructure and let markets do the rest.”
“Coal’s decline was not caused by a federal plot to transition away from coal, like Trump thinks, but rather by markets and innovation. Advancements in renewable energy technologies—which were, and continue to be, supported by subsidies—made the energy source more attractive to investors. Breakthroughs in horizontal drilling in the early 2000s brought a flood of cheap and abundant natural gas to the market. These technologies priced coal out, which lowered energy bills for consumers and significantly reduced greenhouse gas emissions in the United States.
The energy source is also not as cost-effective as the executive order claims. Coal plants are expensive to build and operate, and transportation costs can exceed the price of coal at the mine. These economic factors have informed investors and utilities not to build coal-fired power plants—the most recent large plant was built in 2013—which has made the current fleet of these power plants less efficient than other energy sources.
To be sure, some regulatory barriers, including federal air quality standards and state-level bans, have made coal less competitive. However, “it is the market that explains coal’s decline better than regulations,” Philip Rossetti, an energy policy analyst at the R Street Institute, tells Reason.”
“Americans produce a lot and consume a lot. We have among the highest average incomes and we buy a lot of stuff. We derive pleasure from acquiring and using material things, whether they’re toys, clothes, video games, or cars. If 37 dolls make you happy, and you have the means, then go out and buy 37 dolls. It is not a question of whether we need them or not.
Trump’s comments are an explicit rejection of materialism, abundance, and capitalism itself. I much prefer the Trump who was obsessively tweeting about stocks going up in his first term. Not only is Trump not tweeting about stocks, but he seems entirely indifferent to the prospect of a recession.
In other comments, Trump has said that prosperity can be achieved through tariffs—which is obviously untrue—so it seems likely that he’s willing to trade off some short-term economic pain for potential long-term gain. But as any student of economics will tell you, the tariffs are all pain, and even if the president doesn’t expect a recession, we are probably going to get one.”
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“There doesn’t seem to be as much visceral outrage at Trump’s assertion that American girls can make do with less. Yet, if there is a greater good here, Trump has been unable to articulate it. If the tariffs are in place simply because Trump romanticizes the late 1800s and thinks we can finance government spending with tariff revenue, then we are doomed.
This rhetoric from Trump has a great deal in common with Bernie Sanders’ anti-capitalist worldview. Between the tariffs, the increasingly progressive income taxes, the incompetent attempt to cut government spending, and the explicit anti-materialism, Trump is off to a bad start with capitalists.
In the past, those with a desire for free-ish markets would generally vote Republican. At least in the past, the Republicans were pro-growth. What does it mean when both major political parties are anti-growth and anti-materialism? What does it mean when the political apparatus of a country is wholly aligned for it to fail?”
We should care about the economy. The economy is people’s lives.
We should think about where markets work best and where the government works better. We should consider the structure and incentives of a particular market.
“In the first two years of the pandemic, American alcohol rules underwent a fundamental shift. States started enacting emergency orders—and then cementing those orders in legislation—that authorized never-before-seen innovations in alcohol policy, such as letting restaurants and bars deliver booze and sell it to go. But if 2020 and 2021 ushered in new hopes of opening up American alcohol markets, 2022 is the year when protectionism struck back.
In the early months of the pandemic, state governments were reacting in real time to unprecedented circumstances. The new environment included stay-at-home orders, social distancing guidelines, and masking mandates. It no longer became viable for most retail businesses to rely solely on an in-person customer base, as the entire economy shifted over to a delivery-centric model. Restaurants, breweries, wineries, and neighborhood liquor stores all faced an existential business crisis.
States reacted by upending a nearly centurylong consensus on alcohol regulations. Before, it was essentially unheard-of to let a pizzeria throw in a margarita with a delivery order. Then states started issuing emergency orders that allowed it. And practices that had been slightly more common—such as allowing alcohol to be included in grocery store deliveries, which numerous states permitted before COVID-19—spread to an unprecedented number of locales.
Unsurprisingly, these changes proved popular. In states where citizens were polled, strong majorities expressed their support for more types of to-go and delivery booze. Lawmakers can read polls, and a wave of states either extended the reforms or made them permanent.
The results were dramatic. When 2020 began, no place in America had a statewide to-go or delivery alcohol law for restaurants. By the fall of 2021, 29 states had such a law on the books. During that time, another seven states passed laws permitting alcohol delivery from off-premise stores, such as grocery or liquor stores, and eight states passed laws expanding the delivery capabilities of breweries, distilleries, and other alcohol producers.
But in 2022, this explosive rate of reform slowed down. The progress didn’t stop altogether: Nine more states passed to-go or delivery alcohol laws for restaurants, and one more state authorized alcohol delivery from off-premise stores. But the pace of change noticeably declined. Worse yet, several reforms suffered high-profile defeats.”
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“The opposition has finally had a chance to get organized. And by the opposition, I mean entrenched economic interests. In Colorado, incumbent liquor store owners felt the proposed ballot initiatives would hurt their bottom lines by allowing other types of stores, like grocery or chain stores, to sell and deliver alcohol. . And in California and elsewhere, alcohol wholesalers have become increasingly aggressive in opposing any direct-to-consumer reforms that would let alcohol makers cut out the middleman and ship products directly to their customers.”
“labor force participation remains stubbornly low, with only 62.3 percent of the civilian population working or actively looking for work—well below pre-pandemic levels. And even before the pandemic, that figure had been steadily declining for years.”
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“the largest component of the most recent reduction appears to be older people who took retirement early and/or previous retirees who have not rejoined the work force at the rates they once did. This trend may well reverse itself if the stock market continues to decline and retirement accounts evaporate, but for now it looks like baby boomers turning on, tuning in, and dropping out—however belatedly—are at least as much of a labor force problem as wayward youths.”
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“”The process of contracting a worker is often close to ultimatum bargaining,” explained Elwyn Davies (then with the University of Oxford) and Stanford University’s Marcel Fafchamps in a 2016 paper exploring the effects of competition on behavior within the ultimatum game. “The employer specifies a job description and proposes a wage and the worker accepts or rejects.
So if employment is an ultimatum game—where playing along might get workers less than employers, but refusing to play gets everyone zero—what is causing the perception that the terms of employment are no longer worth accepting, even when both parties would benefit?
Positive views of capitalism more generally have slipped since 2019, with 39 percent expressing negative views in an August Gallup poll. Another Gallup poll found an uptick of 3 percentage points in people who say they are “completely dissatisfied” with their jobs, while the number of people who were “completely satisfied” fell 8 points.
The perception that conventional jobs are essentially offering workers a pittance while greedily holding back the bulk of the wealth is common in places like the r/antiwork subreddit, which has 2.3 million members. In fact, there’s at least one discussion of the ultimatum game itself on that subreddit, which pulls some figures on companies’ revenue vs. worker compensation and concludes: “If working for Apple was the ultimatum game, the proposer just got $100. They’re offering you 23 [cents], and they keep $99.77. Deal or no deal?” The relative sizes of these numbers might also explain why simply raising wages hasn’t brought people into the workforce, especially when paired with increased awareness of and dissatisfaction with the gap between CEO pay and worker pay in large corporations.”
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“Right now there’s something broken in our economy that is preventing employers and employees from cooperating with each other. The result is that too few deals are being struck and everyone is suffering. The challenge ahead is how to rebuild a sense that the game is fair and everyone is playing in good faith.”
“The free market’s price system, along with competition by sellers for customers and by consumers for good deals, play an essential role in gathering and processing the information about our economy that is dispersed among millions of buyers and sellers. The resulting prices are a measurement of how much people value goods and services.
In a well-functioning competitive market, this argument continues, these critical price “reports” tell us the most advantageous ways to use finished goods and services, intermediate goods, raw materials, and—importantly—human time and talent, and lead entrepreneurs to produce what we want most intensely as efficiently as possible. In economics terms, prices convey information about scarcities and about wealth-creating incremental substitutions.
It’s a mind-blowing system where, as French political scientist Frederic Bastiat reminded us decades ago, although no one plans it, “Paris gets fed daily.”
Enter Samuel Gregg and his wonderful new book, The Next American Economy. Gregg’s case for the free market goes beyond the classic economic argument.
He writes that “the case for free markets involves rooting such an economy in what some of its most influential Founders thought should be America’s political destiny; that is, a modern commercial republic.” He adds that “politically, this ideal embodies the idea of a self-governing state in which the governed are regularly consulted; in which the use of the state power is limited by strong commitments to constitutionalism, the rule of law, and private property rights; and those citizens consciously embrace the specific habits and disciplines needed to sustain such a republic.”
Yes! I like to believe I’m a great advocate for markets, but whenever I omit these last points, I sabotage my own case. For one thing, terms like “competitive markets” give the impression of a heartless process. But the most important aspect of this competitive process is cooperation.”
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“No serious free marketer believes that markets are perfect. We aren’t utopians. Unfortunately, perfect markets and perfect competition are often the starting point of economic textbooks. This rosy starting point leads many to conclude that when conditions are less than perfect, the best course of action for a correction is government intervention. It’s wrong.
Not only is government itself imperfect, as anyone can plainly see, but the market is a process to find and fix errors. A market imperfection is an opportunity for entrepreneurs to profit. As Arnold Kling recently wrote, “Markets fail. Use markets.” That’s because, Kling adds, “entrepreneurial innovation and creative destruction tends to solve economic problems, including market failures.”
This isn’t to say that the government plays no role aside from protecting property rights. But it means that faith in government intervention should be tempered with an acknowledgment of government’s own flaws, including a tendency to favor one group of people over another and an inability to adapt when policies fail or circumstances change.
The bottom line is that when we talk about the “free market,” it is a shorthand for a combination of institutions that allow people to cooperate, tolerate one another, live in peace, and flourish. As Gregg reminds us, all these elements are a quintessential part of what President George Washington envisioned for the new nation he led and described as “a great, a respectable & a commercial nation.””
“Sri Lanka’s economy is in free fall. The country doesn’t have enough money to buy essentials: food, medicine, and especially fuel. Buses can’t run, schools can’t open. The economic crisis was years in the making because of mismanagement, but terror attacks in 2019, and later the Covid-19 pandemic, which shriveled Sri Lanka’s tourist economy, pushed it to the brink.
But the domestic political turmoil unfolding in Sri Lanka also links back to the instability across the globe, including the war in Ukraine and all of its consequences.”
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“I tend to believe in markets, but I will say that markets for basic necessities like food, these are not markets you want to operate according to cold economic logic. The market for food is not a market where you want to wind up at the end of the sale with no available supply. We can’t have that because we need to have buffers in the system precisely because of events like the ones we’ve seen. And so if that’s physical grain reserves, [or] if it’s governments willing to use what they call virtual reserves, which are basically governments, in a coordinated fashion, intervening in markets to short these futures contracts to drive prices back down.
There are things that can be done. It’s just going to take an investment of resources and, I think, broader awareness of the enlightened self-interest that it does not make the United States any safer and more prosperous to exist in the world where many of our trading partners and many of our strategic partners around the world are facing instability because they can’t feed their populations.”