March 17, 2020 4:34PM

Sunlight Exposes Dangers: Free Speech In (and After) a Pandemic

Plenty of misinformation is circulating about the COVID-19 pandemic, and that can lead to impatience about or even hostility toward free speech. Would we be better off if the government stepped in to restrict or penalize false reports? Such restrictions would not be unknown in time of epidemic. The city of Newark, N.J. recently threatened to prosecute persons who make false statements about the outbreak.

In a fine new piece, Greg Lukianoff of FIRE (Foundation for Individual Rights in Education) points out that free speech helps bolster resilience to threats like the virus, in multiple ways.

To begin with, the looming crisis with COVID-19 is far worse than otherwise because of the repressive state policies of the Chinese Communist Party (today, China announced that it is expelling reporters from the New York Times, Wall Street Journal, and Washington Post, and will not even let them work in Hong Kong.) Specifically:

Since at least Jan. 1, China enforced severe social media censorship of hundreds of terms relating to the virus, many of which concerned the failures of China’s leadership in controlling the outbreak. Because people in China didn’t have access to information about the virus, they didn’t know to take extra precautions, allowing it to spread faster, all the while preventing the world from preparing its response during the crucial first weeks of the outbreak.

In closed societies like China, government officials have the power to stop the free flow of information if they believe it poses a threat of any kind, either real or imagined; and in authoritarian regimes, like China, the leaders of countries often see anything that might embarrass the country in the eyes of the world as a threat. By contrast, if the initial outbreak had happened in the United States, where the government has comparatively little legitimate power to control what citizens say, it’s doubtful that the disease would’ve gone unnoticed.

Despite the inapt metaphor often applied, Lukianoff argues, an arena of free expression does not really function as a “marketplace of ideas” in which competition works to drive out peddlers of falsehood the way a market for goods tends to drive out peddlers of lamps that don’t light. In the idea business, there are people, institutions, and movements that prosper for the longest time selling total junk. Hence the observed failure of the hope for “the good ideas to ever finally defeat and drive from the earth bad ideas.” The difference is that in systems controlled by the government, like China, those who operate the control switch can cut you off from those trying to reach you with the truth. “Freedom of speech gives you a fighting chance to know the world as it really is.”

Lukianoff’s further and subtler point is this. The free venting of false notions on an ongoing basis, together with the study of false notions circulated in the past, gives us crucial information about the human psyche — what people are prone to believe, and how if ever they might come to be talked out of it — and about the particular landscape of false beliefs we must face in this world right now. It is “the lab in the looking glass.”

Both for scientific reasons and for our success as a democratic republic, we need to know more, not less about the ideas in our fellow humans’ heads. I call it my “Iron Law”: It is always important to know what people really believe, especially when the belief is perplexing or troubling. Conversely, in the overwhelming majority of scenarios you are not safer or better off for knowing less about what people really think.

The “lab in the looking glass” metaphor can also explain a whole lot more of the First Amendment than the Darwinian marketplace of ideas.

For the rest, click here.

March 17, 2020 11:31AM

Nancy Pelosi Wants To Compound Difficulties For Major Employers

Libertarians might disagree on the correct economic response to the coronavirus. It’s a gray area – with difficulty assessing where “public goods” interventions end, in light of a pandemic and failure to insure against it, and where heedless market‐​distorting bailouts begin. But we can all agree on one thing: now is the worst possible time for new government labor mandates on business.

Yet that is what Democrats want to do for many of America’s largest service sector employers. Faced with New York Times criticism of Congress for failing to negotiate for employer‐​paid sick leave in companies with more than 500 workers, House Leader Nancy Pelosi retorted:

I don’t support U.S. taxpayer money subsidizing corporations to provide benefits to workers that they should already be providing. House Democrats will continue to prioritize strong emergency leave policies as we fight to put #FamiliesFirst…Large employers and corporations must step up to the plate and offer paid sick leave and paid family & medical leave to their workers. Both now as we fight the #coronavirus and in the years to come. #COVIDー19

There are many downsides to sick leave mandates in normal times. In the long run we’d expect employers to adjust for a paid‐​leave mandate by offering lower wages or other benefits, such that workers’ total compensation remains unchanged. In the short‐​run reality, when wages are stickier, they encourage job and hours cuts, as Aaron Yelowitz and Michael Saltsman write here.

So advocating this mandate when service‐​sector businesses already see demand cratering and their supply‐​chains disrupted seems utterly destructive. Pelosi is, in effect, saying that the full near‐​term costs of discouraging the spread of the virus through isolating sick employees be borne by large companies, rather than taxpayers. It’s difficult to think of a quicker way of turning what’s (hopefully) a temporary shock for businesses into an unemployment problem.

This is particularly so when you look at the large companies who would be affected. Yes, Walmart should largely see demand hold up. Some restaurants will switch effectively to home delivery. But major employers currently not covered include companies such as Subway, Marriott, Holiday Inn, IKEA, Oliver Garden, and Nordstrom (see graphic below) – all of whom will see big downturns in revenues as voluntary and coercive social distancing ramps up. Food and hospitality industries, in particular, operate on very low profit margins. Increasing their cost base through these mandates could put some in severe trouble.

Ideally we wouldn’t have laws applied differently to small and large businesses. If paid sick leave for employees of small firms is considered so essential for emergency public health reasons that it must be covered by the federal government, it doesn’t make much sense to argue large businesses should instead be mandated to fund it themselves. Particularly when the consequences could be a spate of layoffs from firms already struggling today.

Major employers without paid sick leave

Source: New York Times
March 16, 2020 1:04PM

Robert Murphy on Market Monetarism

In the latest installment in his series, "Understanding Money Mechanics," Bob Murphy takes on Market Monetarism, and Scott Sumner's case for having central banks practice NGDP level targeting in particular. A commentator there writes, "I hope George S. pipes up to defend MM! Seeing the other side can helps [sic] me to understand the theory better."

Far be it from me to refuse such a request!

Murphy devotes much of his post to distinguishing Market Monetarism from both old-time Monetarism and Austrian monetary economics. Much of what I have to say also concerns those distinctions. I hope to persuade readers that Market Monetarism is more consistent with both old-fashioned Monetarism and Austrian economics than Murphy allows, and that, to the extent that it differs from versions of either, it does so in ways that improve upon them.

Read the rest of this post »
March 16, 2020 12:58PM

Coronavirus and NIH/CDC Funding

The rapid spread of coronavirus (Covid‐​19) is focusing attention on the health agencies that are helping to fight the pandemic. This year, the National Institutes of Health (NIH) will spend about $38 billion on research and the Centers for Disease Control and Prevention (CDC) will spend about $8 billion on controlling infectious diseases and other activities.

The health agency budgets have become a political football in recent weeks with various claims being made regarding spending levels under President Trump. Let’s look at some data.

Figure I shows total outlays on the NIH and CDC in real (or inflation‐​adjusted) dollars since 1962. The data is from the most recent federal budget released February 10. It includes estimated spending for 2020 and Trump’s proposals for 2021. I used the budget’s deflator to convert spending to real 2020 dollars.

Real NIH spending soared from the mid‐​1990s to 2011. It was then cut under President Obama but has rebounded under President Trump. Real CDC spending soared from around 1990 to 2010 but has been roughly flat since then. New legislation tackling the coronavirus will increase spending above these levels going forward.


How much should we spend on the NIH and CDC? I don’t know, but there is a stronger argument for government spending on activities that are “public goods,” which are items that create broad benefits but are underprovided by markets. NIH and CDC research into infectious disease and mobilization against pandemics probably fits this category. But other spending by these agencies is more dubious, such as spending on trying to micromanage Americans’ eating, drinking, and smoking behaviors. Also, the sorts of bloat and waste that former Senator Tom Coburn once found at the CDC are not public goods.

In defending the Trump administration’s proposed CDC budget, a spokesman said, “The $4.3 billion funds all of the CDC programs that focus on infectious disease and emergency preparedness activities … This figure reflects that the administration is prioritizing funding for infectious disease and emergency preparedness efforts at CDC, compared to non‐​infectious activities, like studying the health and safety risks of infrequent bathroom breaks for taxi drivers.”

In a flippant way, the spokesman was suggesting that they are steering the CDC budget toward broad‐​based public goods and away from narrow‐​interest spending. The budget (p. 36) says the administration wants “to re‐​focus the Center for Disease Control (CDC) on its core mission of preventing and controlling infectious diseases and other emerging public health issues, such as opioids. As such, the Budget proposes to reduce funding for non‐​infectious disease activities.”

It appears (p. 447) that the main CDC activity the Trump administration proposed cutting was grants to state governments, a reform approach that always makes sense. State public health programs should be funded by state taxpayers. For 2021, Trump proposed cutting state grants, but also proposed increasing CDC staffing (p. 447).

However, let’s say that all CDC and NIH spending is for important federal public goods. That spending is only a small fraction of total Department of Health and Human Services (HHS) spending, which mainly goes toward Medicare and Medicaid subsidies. Those subsidies are not public goods. This year, NIH spending is just 2.9 percent of HHS spending and CDC spending is just 0.6 percent, as shown in Figure 2.

After the current crisis, if policymakers decide to permanently increase infectious disease spending, they should match it with cuts to the vast subsidies in the $1.4 trillion HHS budget.


March 16, 2020 11:39AM

Updated Call for Proposals: Junior Scholars Symposium

Sometimes the foreign policy crises with the most potential to change the world are the ones you just don’t see coming. That’s never been more apparent than today, as we all sit at home engaging in ‘social distancing,’ trying to maintain work productivity while preventing the spread of the novel coronavirus. A pandemic of this magnitude will have unknown – but potentially major – impacts on global politics for years to come.

The Cato Foreign Policy team wants to encourage graduate students to submit abstracts on this, and on other topics in international security to our fall Junior Scholars Symposium. As the event will be held in October, we still intend to hold it, and hope that it will provide a valuable outlet for graduate students who were unable to present at ISA Honolulu, or at other cancelled conferences this spring.

In order to ease the burden in the current unsettled circumstances, we are extending our submission deadline to April 20th. Applicants will now be notified of the status of their applications by May 22nd.

You can find the original call for papers here. The most pertinent details are:

Participants will be expected to produce an original paper of journalarticle length; the workshop will focus on paper presentations, discussion and suggestions for improvement, with the expectation that authors will go on to seek publication in external journals or to build upon this research as they move towards the dissertation phase of their studies.

Participants are particularly expected to highlight the policy relevance of their work. In keeping with the Cato Institute’s commitment to moving U.S. foreign policy towards prudence and restraint, the policy implications of papers should be broadly compatible with a pragmatic realist approach to foreign policy.

The workshop will be held at Cato’s offices in Washington, D.C on October 9thand 10th. Participants will receive a stipend of $500, and will have reasonable travel and accommodation costs for the workshop covered.

To apply, submit an abstract of no more than 500 words to The abstract should detail your proposed research project, and be accompanied by a CV. Candidates should have a background in political science, history, public policy or a related field, and must have completed at least one year of graduate study in a PhD program by the time of the workshop.

If you fit these criteria, please consider applying. We are particularly happy to consider abstracts for papers that were unable to be presented at ISA or other conferences. Stay healthy!

March 13, 2020 4:24PM

Pizza Democracy

Some people actually like pineapple on pizza. Others sensibly do not. Bàcaro Pizzeria chain in Montreal decided to let its customers vote. Now me, I would think customers vote every day in what they order. But inspired by a vision of democracy, chef and co‐​founder Angelo Mercuri wanted to put the question to an actual vote. And he vowed that if the people rejected the Hawaii 50 pizza, it would be removed from the menu.

In the event, 53 percent voted no. “Democracy rules, and pineapple will never again show up on our menu,” Mercuri said. Of course, that means the 47 percent who like pineapple pizza (or just didn’t want to ban it) won’t be able to get the pizza they want. Mercuri has applied the dysfunction of political decision‐​making to the normal individualist functioning of the marketplace. I wrote about a similar example from Sesame Street in my book The Libertarian Mind:

In an election special, the Muppets and their human friends have three dollars to spend, and they learn about voting by deciding whether to buy crayons or juice.

Rosita: You count the people who want crayons. Then you count the people who want juice. If more people want juice, it’s juice for everyone. If more people want crayons, it’s crayons.

Telly: Sounds crazy but it might just work!

But why not let each child buy what she wants? Who needs democracy for such decisions? There may be some public goods, but surely juice and crayons don’t count.

Imagine doing this for other market decisions. As of 2019, Lenovo edged out HP for PC market share. So everybody gets a Lenovo, and HP, Apple, and other minority preferences are banished. Big Mac is more popular than the Double Cheeseburger, so no more Doubles. More people choose the Toyota Camry than any other passenger car, so it’s Camry for everyone.

Why would anyone want such a policy? Democratic decision‐​making is appropriate for choosing political leaders. It may be useful for making large public policy decisions that require a single answer. But it’s just silly to let customers vote on whether a menu item should be available to other customers.

Of course, Monsieur Mercuri may be crazy like a fox: his silly vote made the local paper, and NPR, and now this blog post.

March 13, 2020 1:04PM

Technology and Cooperation Help Fight the Pandemic

The pandemic caused by the new coronavirus (COVID-19) from Wuhan, China, is now a serious and global problem. And that problem has been made even worse by a culture of constant alarmism making it hard to distinguish real threats from exaggerated claims, as the well‐​known science writer Matt Ridley has pointed out. But even when faced with the genuine threat of a pandemic, there are reasons to take heart and think that humanity will rise to the challenges ahead.

First, humanity has never been better prepared technologically to deal with a pandemic. We are fortunate to live in an age of drive‐​through diagnostic test stations, advanced computer modeling that can help predict where and how fast the virus will spread, real‐​time interactive online outbreak‐​tracking maps, and medical supplies delivered by self‐​driving cars. An AI epidemiologist sent the first warnings about the novel coronavirus. Information about the virus is able to travel faster than the virus itself, arming individuals with knowledge about how to slow the disease’s spread.

There is currently no vaccine and no cure for the disease. However, medical research is faster and of higher quality than at any other time in history. The amount of time that it takes to successfully create a vaccine for a disease has come down thanks to scientific advances, better communications technology, and more extensive cooperation among scientists across the globe.

Research for a vaccine to help stem the COVID-19 outbreak got underway within just hours of the virus being identified. Animal testing of the vaccine has shown promise. Human trials are now just weeks away, with a vaccine expected to be ready for public use within the next 12 to 18 months. That means that a vaccine could become available within two years of the virus’s emergence. For comparison, it took 48 years to create a successful vaccine for the polio virus.

In addition to progress toward a vaccine, several promising treatments for those who have been infected are currently being tested. Potential treatments under evaluation range from repurposed HIV‐​fighting drugs, such as lopinavir and ritonavir, as well as chloroquine phosphate, which is normally used to treat malaria and certain liver infections.

Second, human beings have an incredible capacity for voluntary cooperation, particularly in times of adversity. In South Korea, the damage of the outbreak has so far been successfully minimized by widespread and mostly voluntary cooperation. The vast majority of the country’s mostly healthy people have opted to remain at home (i.e., to self‐​quarantine). Moreover, the Koreans are avoiding travel and large gatherings. While those who have tested positive for COVID-19 are under mandatory quarantine, the vast majority of “social distancing” measures in the country are voluntary.

Similarly, in the United States, where the outbreak is still in an early phase, private actors are swiftly choosing to take thorough action to slow the virus’s spread. Many U.S. companies and organizations are helping to safeguard the health of their employees by intensifying office‐​wide cleaning procedures, setting up hand sanitizer dispensers throughout their workspaces, and promoting social distancing by conducting meetings over the phone, canceling events and offering employees the option of working remotely when possible.

While some localities have banned large gatherings, purely voluntary social distancing measures are now widespread throughout the country. And technology is allowing society to keep running. To name just a few examples: digital technology is enabling numerous universities to switch to online classes during the pandemic, letting churches empty their pews and broadcast sermons online, giving individuals the option of video‐​chatting instead of hosting family gatherings, and allowing think tanks to host online‐​only events.

Speaking of the think tanks, please consider registering for’s upcoming online event to launch the 3rd annual Simon Abundance Index on April 22nd, the 50th anniversary of Earth Day.

Human beings, when left to their own devices, are not only cooperative but generous. Numerous individuals are now offering to deliver groceries for elderly or immunocompromised neighbors who are at greater risk of severe complications from the virus. Private charity is stepping up to offer COVID-19 testing kits. That’s all the more important considering that the U.S. Center for Disease Control (CDC) has come up short by refusing to test many potential cases and only recently lifting a ban on allowing private labs to test for the virus despite the severe shortage in the government’s own testing capacity.

The threat from COVID-19 should be taken seriously, but there are reasons for rational optimism even during a pandemic.