Latest Cato Research on Political Philosophy en William Yeatman discusses the separation of powers on The Bob Harden Show Fri, 17 Jan 2020 12:37:30 -0500 William Yeatman Be Skeptical about the Census Matthew Feeney <div class="lead text-default"> <p>This year the Census Bureau will begin conducting the constitutionally required census, which takes place every 10&nbsp;years. Many readers will dutifully fill out the forms, informing the bureau about their household and providing researchers with data. In May, the bureau will begin visiting those who haven’t responded to the census.</p> </div> , <div class="text-default"> <p>But why wouldn’t someone want to contribute to social science and an accurate head count? The history of the census provides ample evidence to justify such reluctance.</p> <p>The census sounds harmless enough. In a&nbsp;representative democracy like the United States where seats in at least part of the legislature are determined by population, it’s important to know how many people live in the country and where they live. The framers of the Constitution codified the decennial census as the mechanism for determining the number of seats each state occupies in the House of Representatives. Yet the information included in the census has been used to violate civil liberties, and it would be a&nbsp;mistake to assume similar abuses won’t occur again.</p> <p>Governments often overreact in the wake of a&nbsp;crisis, and a&nbsp;crucial feature of such overreactions is the collection and analysis of information. During the first Red Scare, a&nbsp;24‐​year‐​old J. Edgar Hoover was put in charge of the so‐​called “Anti Radical Division” formed by the Attorney General A. Mitchell Palmer after a&nbsp;string of anarchist bombings. Hoover, who previously worked at the Library of Congress, used his librarian skills in his hunt for aliens to deport. His team assembled hundreds of thousands of index cards associated with not only individuals but publications and organizations. These notecards aided Department of Justice officials, who conducted the so‐​called Palmer Raids in late 1919 and early 1920. The raids resulted in thousands of people being arrested without warrants, hundreds of whom were deported.</p> <p>Such zeal for data collection was not isolated to the first Red Scare. Other crises have resulted in increased information gathering. And one of the best sources of information available to the government is the census.</p> <p>After the Japanese navy’s air service bombed the U.S. Navy base at Pearl Harbor in December 1941, military officials reached for the census to facilitate one of the most shameful civil liberty abuses in American history: the internment of Japanese‐​Americans. A&nbsp;few months after the attack, President Franklin D. Roosevelt issued Executive Order 9066. The order authorized the secretary of war to exclude those considered national security risks from designated military areas. As result, 120,000 people of Japanese descent — the majority of whom were U.S. citizens — were moved into internment camps.</p> <p>Census officials denied that the bureau had assisted Japanese internment. But in 2000 historian Margo Anderson of the University of Wisconsin and Fordham University statistician William Seltzer uncovered evidence that Census Bureau officials provided information on whereabouts of people with Japanese ancestry. In 2000, the Census Bureau director apologized, but only a&nbsp;few years after the apology the bureau was aiding the surveillance of another minority group.</p> <p>In August 2002 and December 2003, the Census Bureau put together tabulations of Arab‐​Americans for Customs and Border Protection. These tabulations included information on how many Arab‐​Americans lived in specific ZIP codes. The creation of these tabulations was a&nbsp;small part of the U.S. government’s broader overreaction to the 9/11 terrorist attacks, which resulted in widespread and needless infringements on civil liberties.</p> <p>We should expect that in response to the next crisis officials won’t be shy about seeking census data. This risk is more pronounced when the targets of government surveillance come from broad groups such as “Japanese‐​Americans” or “Arab‐​Americans.” The history of American surveillance reveals a&nbsp;list of the targets that is long and diverse. Today the administration is concerned about illegal immigrants. This misguided concern prompted the administration to seek to add a&nbsp;citizenship question to the 2020 census before the Supreme Court ruled against the administration.</p> <p>Future administrations will have different targets. Given that anyone could one day be on the receiving end of government surveillance, it behooves us to be hesitant to volunteer intimate details about our families.</p> <p>Refusing to accurately complete a&nbsp;census form is against the law and could result in a&nbsp;fine. Fortunately, the Department of Justice is hesitant to pursue census refusal cases. It’s true that the census provides researchers with valuable data, but given the history of government overreaction to crises you could forgive those who err on the side of providing less information to the Census Bureau.</p> </div> Sat, 11 Jan 2020 12:28:14 -0500 Matthew Feeney George A. Selgin discusses the jobs report numbers on Sinclair Broadcast Group Fri, 10 Jan 2020 10:18:34 -0500 George Selgin Want to Create an Immigration System That Works? Look to Airbnb Ryan Bourne <div class="lead text-default"> <p>Plenty of foreigners would value the opportunity to work in the UK for a&nbsp;short period. Lots of UK citizens, meanwhile, would prefer some time out of the labour market to upskill, care for a&nbsp;loved one, or even travel. Yet today these two groups have no means of trading their desires. We have what economists call “a missing market”.</p> </div> , <div class="text-default"> <p>Economists view movements of people for work as synonymous with international trade.&nbsp;<a href="" target="_blank">Barriers to immigration prevent workers moving to where they are most productive</a>, making the global economy poorer. But as Brexit showed, completely “open borders” appears a&nbsp;politically unsustainable proposition.</p> <p>Voters want migration controlled. They see their country more as a&nbsp;club than part of a&nbsp;global labour market. So although most evidence suggests immigration enriches the economy, voters place heavier weight on the welfare of adversely affected domestic citizens, the localised impact on public services, or perceptions of cultural damage, than on aggregate benefits including to migrants themselves.</p> <p>Hence the Conservatives have pledged to end free movement for EU citizens after Brexit. They’ve promised instead an “Australian‐​style, points‐​based system”, applied equally to all countries. Our Government would rank potential migrants according to certain characteristics for determining visa eligibility, including educational achievement, language skills, work experience, or having a&nbsp;job offer.</p> <p>Such a&nbsp;bureaucratic approach — setting conditions and allowing all who fulfil them to enter — is one of three broad ways to “control” immigration. The others are quotas (imposing a&nbsp;crude cap on immigrant numbers) or prices (some financial barrier to entry). Most real‐​life systems are hybrids of these approaches.</p> <p>Economically, though, not all immigration controls are created equal. Capping numbers creates obvious absurdities. Suppose a&nbsp;limit is set at 99,999 people per year. Would the UK benefit if an international footballer was denied a&nbsp;Premier League job as number 100,000? The answer is, clearly, no.</p> <p>Nor is the Government likely to do well at centrally planning the labour market&nbsp;<a href="" target="_blank">through a&nbsp;points‐​based system</a>. Already ministers are talking up a&nbsp;separate visa route for NHS nurses. Agriculture will surely follow. Whitehall has no knowledge of migrant’s potential for entrepreneurship, nor can it second‐​guess businesses’ needs in an environment in an ever‐​changing economy.</p> <p>Is there a&nbsp;market‐​based immigration policy that could harness most of the benefits of immigration, address some stated public concerns, while avoiding these destructive economic impacts? There is. And it comes back to our “missing market” above.</p> <p>One of the most valuable assets we UK citizens have is our permanent “right to work” in a&nbsp;high‐​wage economy. Yet this is an effective property right we own but can’t currently trade.</p> <p>Suppose instead we had the option to “rent out” this right, leasing it to a&nbsp;foreigner for a&nbsp;contractually agreed period. Technology now exists such that the Government could do for work permits what Airbnb has done for our homes — making ownership of our “right to work” a&nbsp;marketable asset.&nbsp;Just as&nbsp;<a href="" target="_blank">leasing your home on Airbnb temporarily disables you from living in it</a>, leasing out your work right&nbsp;would temporarily prevent you from working.</p> <p>If such trade were allowed, the foreigner would get the time‐​limited right to work in the UK in return for the UK citizen (likely to be in temporary need) getting a&nbsp;cash sum they’d prefer. As a&nbsp;voluntary trade, both sides would be better off. Most gains from immigration would still be realised, but with more of the surplus accruing to participating UK citizens.</p> <p>Economists Martin Ravallion and Michael Lokshin have developed such a&nbsp;proposal. Under their scheme, a&nbsp;government auction website would announce start dates and work permit durations for bidding. Eligible UK citizens could register, setting their minimum asking price for giving up their right to work, with foreign buyers registering maximum bids.</p> <p>Software would then “clear” the market, setting the final price such that demand and supply intersect. Those who bid at least the discovered market price would be matched anonymously with UK citizens willing to sell at or below it. Transactions would be complete when payments were transferred through a&nbsp;clearing system to the seller.</p> <p>After the work permit expires, British participants would regain the right to work. Such a&nbsp;rental scheme brings obvious benefits. An unchanged potential number of workers would somewhat alleviate fears about migrants taking jobs. Much of the black market in foreign labour would be eliminated too — now UK citizens, rather than human traffickers, would be capturing the financial gain.</p> <p>What’s more, UK citizens, would, in effect, now benefit from the option of a&nbsp;time‐​limited, out‐​of‐​work “basic income”. This additional social protection, fully funded by market activity, could be used to retrain, move, cope with unemployment, raise children, or remunerate people for caring for the ill, disabled, or elderly.</p> <p>Other details would need to be thrashed out. UK eligibility might be restricted to those with strong employment histories, to stop it compounding social problems associated with long‐​term unemployment. Some secondary market for people whose situations change will be necessary. Other considerations include whether family members of foreign work permit holders would be able to live in the UK, the lengths of permits, and whether rental payments constitute taxable income.</p> <p>But these are details for a&nbsp;market that’s clearly viable. According to Oxford University’s Migration Observatory, an average of 150,000 immigrants per year (between 2012 and 2016) had stays of just three to 12&nbsp;months for work or study. Between 1990 and 2017, a&nbsp;large majority of non‐​UK nationals who left the country had lived here for five years or fewer.</p> <p>A work permit rental scheme wouldn’t be the complete answer. People migrate for non‐​work reasons too. But if we want to maintain the economic gains of market‐​based immigration for work, while flipping the economic interests of poorer groups affected by or opposed to it, then Boris should harness technology to create a&nbsp;market in work permits. Airbnb points the way.</p> </div> Thu, 09 Jan 2020 18:27:25 -0500 Ryan Bourne Trump the Decider Gene Healy <p>The MQ‑9 Reaper attack that took out Iranian General Qassim Suleimani was a drone strike for peace, President Trump <a href="">explained</a> last week: we took action “to stop a war. We did not take action to start a war.” That’s a theory, and it’s going to be put to the test. “All is well!” the president tweeted last night as a salvo of <a href="">Iranian missiles</a> fell on U.S. positions in Iraq: “So far, so good!”</p> <p>Trump’s decision to target Suleimani — a figure <a href="">described as</a> the Iranian equivalent of “an American Vice President, chairman of the Joint Chiefs and CIA director rolled into one” — wasn’t the first time the U.S. government has aimed lethal force at a top government official. There’s the checkered — and occasionally absurd — history of the CIA’s Cold War <a href="">assassination attempts</a>, including the Kennedys’ efforts to kill Fidel Castro. But we’ve also gone after legitimate targets in congressionally authorized wars: the downing of <a href="">Admiral Yamamoto’s plane</a> in WWII and the attempted <a href="">decapitation strike</a> against Saddam Hussein at the start of the Iraq War.</p> <figure role="group" class="align-right filter-caption"><div data-embed-button="image" data-entity-embed-display="view_mode:media.blog_post" data-entity-type="media" data-entity-uuid="bc6c4a86-2002-4f2a-b41a-27b0654864b2" data-langcode="en" class="embedded-entity"> <p><img srcset="/sites/ 1x, /sites/ 1.5x" width="700" height="394" src="" alt="Pow." typeof="Image" class="component-image" /></p></div> <figcaption><div class="figure-caption text-sans-alternate">Ready. Fire. Aim. </div> </figcaption></figure><p>The Suleimani killing was something new under the sun. It marked the first time an American president has publicly ordered the assassination of a top government official for a country we’re not legally at war with.</p> <p>This is where you’re <a href="">supposed to acknowledge</a> that the Quds Force commandant was an evil guy who got what he deserved. Done. But that’s got nothing to do with whether the move was wise or constitutionally permissible.</p> <p>U.S. forces took out Suleimani “at the direction of the President,” per the Pentagon’s <a href="">announcement</a>. On what authority, exactly? For now, the official rationale is <a href="">classified</a>. In terms of public justification, all we have is some <a href="">hand‐​waving</a> by Trump’s national security adviser about the president’s “constitutional authorities as commander in chief to defend our nation” and the 17‐​year old Authorization for the Use of Military Force in Iraq (2002 AUMF). Neither comes close to vesting the president with the power to set off a whole new war.</p> <p>The <a href="">2002 AUMF</a> authorizes the president to use military force in order to “defend the national security of the United States against the continuing threat posed by Iraq” and enforce various UN resolutions “regarding Iraq.” Unless “45” is going to break out <a href="">the presidential sharpie</a> and change the “q”s to “n”s, that’s not going to cut it. Neither will the 2001 AUMF, as I’ve explained at length elsewhere (See: <a href="">“Repeal Old AUMFs and Salt the Earth”</a>).</p> <p>If and when the administration deigns to reveal its legal theory, the argument will probably be: (1) the AUMFs license our continuing presence in Iraq; and (2) the president has inherent power under Article II to defend our personnel from the sort of attacks Iranian proxies have carried out <a href="">in recent weeks</a>. (<em>National Review</em>’s David French outlines that theory <a href="">here</a>.)</p> <p>How far up the escalation ladder are these powers supposed to extend, however? “Supreme Leader” Ayatollah Ali Khamenei sits atop the military chain of command and apparently <a href="">had to approve</a> the recent militia attacks. Does Article II empower Trump to order a hit on the Ayatollah? That we wouldn’t miss <em>that</em> guy either seems rather beside the point.</p> <p>It’s true that Article II leaves the president with some defensive war powers, allowing him to “repel sudden attacks,” as <a href="">Madison’s notes</a> from the Convention put it. But as we move up the ladder, at some point we’ve left the realm of self‐​defense and the response becomes in effect, a declaration of war. The Constitution vests that power <a href="">in Congress</a>.</p> <p>War powers practice in the early republic suggests that the president’s power of <a href="">“self‐​defense”</a> was far narrower than Trump’s defenders imagine. During our first four presidential administrations, the U.S. was on the receiving end of multiple acts of war, including “invasions of territory (Creek [Indians]), illegal capture of neutral shipping not carrying enemy contraband (England and France), and the kidnapping of thousands of foreign sailors (England).” Yet, as the University of Virginia’s Sai Prakash <a href="">explains</a>, “even though [those] nations had declared war on the United States in formal and informal ways, Presidents Washington, Adams, Jefferson, and Madison believed that the President could not wage war in response.” Without formal authorization from Congress, early presidents recognized that “they were limited to those steps falling short of a declaration of war, such as defensive measures.” As Washington <a href="">put it</a> in 1793,</p> <blockquote><p>“The Constitution vests the power of declaring war with Congress; therefore no offensive expedition of importance can be undertaken until after they shall have deliberated upon the subject, and authorized such a measure.”</p> </blockquote> <p>In his June 1, 1812 message to Congress, President James Madison <a href="">outlined</a> a long train of abuses committed by the British: they’d “wantonly spilt American blood within the sanctuary of our territorial jurisdiction” and ripped “thousands of American citizens… from their country and from everything dear to them,” forcing them into the service of the empire. “We behold, in fine, on the side of Great Britain, a state of war against the United States, and on the side of the United States a state of peace toward Great Britain,” Madison declared. But whether the United States could answer those abuses with war “is a solemn question which the Constitution wisely confides to the legislative department of the government.”</p> <p>Even James K. Polk understood that just drawing enemy fire wasn’t enough to get a war started. You could, <a href="">as Polk did</a>, gin up a pretext for one by sending U.S. troops into disputed territory and getting some of them killed, but to “take the fight to the enemy,” you needed <a href="">authorization from Congress</a>.</p> <p>All this is likely <a href="">“academic.”</a> The White House likely doesn’t consider itself bound by <a href="">its own</a> Office of Legal Counsel opinions, much less the original meaning of the Constitution’s war powers provisions.</p> <p>But what recent events have made plain, as Jack Goldsmith <a href="">sums up</a>, is that</p> <blockquote><p>“Our country has, quite self‐​consciously, given one person, the President, an enormous sprawling military and enormous discretion to use it in ways that can easily lead to a massive war. That is our system: one person decides.”</p> </blockquote> <p>I’d quibble with “self‐​consciously,” otherwise, as a descriptive matter, that’s right: that’s the system we’ve got. And it’s the inverse of the one the Framers designed: “This system will not hurry us into war,” James Wilson told delegates to the Pennsylvania ratifying convention in 1787, “it is calculated to guard against it. It will <a href="">not be in the power of a single man</a>… to involve us in such distress, for the important power of declaring war is vested in the legislature at large.”</p> <p>As of this morning, things looked brighter than they did for several harrowing hours last night. Iran’s response didn’t result in any American deaths, perhaps by design: “We do not seek escalation or war,” <a href="">tweeted</a> Foreign Minister Javad Zarif. Trump may be inclined to deescalate as well. Cooler heads may yet prevail.</p> <p>It is, however, insane and intolerable that peace depends on the restraint of the Islamic Republic <em>and</em> an American president given to rage‐​tweeting <a href="">war‐​crime threats</a>. No one fallible human being should be entrusted with the war powers now vested in the presidency. Now, more than ever, Congress needs to do everything in its power to reclaim its authority over war and peace.</p> Wed, 08 Jan 2020 14:03:33 -0500 Gene Healy Gridlock: From Liberty’s Shield to Sword for the Status Quo Tue, 07 Jan 2020 09:35:10 -0500 Roger Pilon Keith E. Whittington on Repugnant Laws Fri, 03 Jan 2020 15:29:20 -0500 Keith E. Whittington Leszek Balcerowicz on liberalism and authoritarianism Fri, 03 Jan 2020 15:27:11 -0500 Leszek Balcerowicz Sen. Rand Paul (R‑KY) on The Case Against Socialism Fri, 03 Jan 2020 15:20:53 -0500 Sen. Rand Paul Robert A. Levy discusses supply side economics on The Bob Harden Show Fri, 03 Jan 2020 09:56:00 -0500 Robert A. Levy After a Decade of Macroeconomics, It’s the Small Things That Need Fixing Ryan Bourne <div class="lead text-default"> <p>It could have been worse. That’s hardly a&nbsp;stellar verdict on the 2010s as a&nbsp;decade of UK economic policy. Yet in a&nbsp;10‐​year period that saw the mopping up of the financial crisis, a&nbsp;controversial deficit reduction programme, and then the political convulsions of Brexit, it doesn’t take much imagination to envisage economic outcomes much weaker than we’ve seen.</p> </div> , <div class="text-default"> <p>After the financial crisis, a&nbsp;mistaken lurch Left in policymaking seemed feasible. Economic commentator Will Hutton talked confidently of how “an old order is once again giving way to another” and of a “once‐​in‐​a‐​lifetime chance to change British capitalism”. The Left had a&nbsp;clear narrative, portraying the financial crisis as the ultimate manifestation of “deregulation” and supposed “neoliberal” excess.</p> <p>Mercifully, they fluffed their lines. Sure. Old, failed ideas resurfaced and became renormalised in public debate — from Keynesianism to strong unions, “New Deals” (this time Green) to price controls. Britain briefly flirted with Jeremy Corbyn, and the Conservatives became more attracted to nannying and susceptible to the allure of central planning themselves. But a&nbsp;sea‐​change in policy away from markets hasn’t materialised, yet. Britain has, so far, avoided throwing out the baby with capitalism’s bath water.</p> <p>After‐​the‐​horse‐​had‐​bolted regulatory reform of the banking system instead quickly gave way to a&nbsp;decade dominated by macroeconomic debates — of monetary versus fiscal policy as the best stabilisation tool, stimulus versus austerity for the public finances, and then, most recently, on the short and long‐​term consequences of Brexit. Plenty of mistakes were made, but Britain’s aggregate outcomes, viewed coolly and objectively, have not been disastrous.</p> <p>Monetary policy after the crash helped avert a&nbsp;deep depression. Fiscal repair in terms of reducing the day‐​to‐​day structural deficit afterwards is now largely complete, with headline borrowing having fallen from above 10pc of GDP to around 2pc once new spending promises kick in.</p> <p>What’s more, this has been achieved alongside a&nbsp;<a href="" target="_blank">remarkable employment performance</a>, no doubt aided by Britain’s flexible labour market. Unemployment, at 3.8pc, is now at its lowest since 1973; the employment rate for 16 to 64‐​year‐​olds, at over 76pc, is at its recorded peak. Austerity didn’t deliver a&nbsp;lost generation of workers as some claimed it would. Nor did it result in the skyrocketing inequality and material deprivation some thought an inevitable consequence.</p> <p>In fact, though there are no doubt families struggling in insecure work, or others having seen working‐​age benefit cuts, the proportion of children in households facing both low income and material deprivation has fallen since 2010. Income inequality, as measured by the Gini coefficient, is lower now than a&nbsp;decade ago.</p> <p>Britain’s economy has proven more a&nbsp;hardy weed than the delicate flower of politicians’ minds. George Osborne&nbsp;<a href="" target="_blank">predicted an immediate recession if we dared to vote to leave the EU</a>&nbsp;in 2016. Uncertainty since that referendum has indeed proven a&nbsp;drag on growth, but as with the major fiscal consolidation we saw through to 2016, the British economy has proven a&nbsp;lot more robust and adaptive than many expected.</p> <p>We shouldn’t be Panglossian about the 2010s, of course. With alternative policy, better outcomes could have been delivered. Monetary policy “forward guidance” from the Bank of England proved a&nbsp;huge misreading of the potential of the labour market.</p> <p>The coalition government front‐​loaded tax rises and cuts to investment spending, proving more of a&nbsp;drag on economic activity than if they’d prioritised reform towards a&nbsp;smaller day‐​to‐​day state that did fewer things better. Huge public finance headwinds from an ageing population remain in the future.</p> <p>But Britain’s policymakers’ main mistake was putting too little focus on what became our biggest self‐​evident structural problem: stubbornly weak productivity growth. Output per worker growth has averaged just 0.3pc a&nbsp;year since 2008, a&nbsp;figure earning the dubious honour of the Royal Statistical Society’s “stat of the decade”. As a&nbsp;result, we are 20pc poorer than we would have been if the pre‐​crash trends of 2pc productivity growth per year had continued.</p> <p>Now, that counterfactual is no doubt over‐​optimistic given trends in other developed countries. But as time has gone on, attributing this malaise to a&nbsp;hangover from the financial crash or a&nbsp;consequence of deficit reduction has become ever more difficult to justify.</p> <p>Whatever its causes, the consequences of&nbsp;<a href="" target="_blank">weak productivity growth</a>&nbsp;– not least weak wage growth and lower tax revenues — deserved a&nbsp;policy reassessment. But so much of the past decade has been spent fighting crises, unexpected political events, or near‐​term fiscal shocks, we’ve neglected discussion of the microeconomic building blocks of longer‐​term prosperity.</p> <p>As we enter the 2020s, this focus must change. Brexit is forcing a&nbsp;debate about the nuts and bolts of good trade policy. Boris’s victory is seeing a&nbsp;repoliticisation of infrastructure spending and a&nbsp;battle of ideas on regional regeneration and land‐​use planning laws. How we regulate machines, driverless cars and digital platforms will become more important as innovation continues apace.</p> <p>The economic consequences of efforts to lower carbon emissions and immigration will be heavily dependent on the nuts and bolts of the frameworks government introduces.&nbsp;<a href="" target="_blank">Britain’s new Bank of England Governor</a>, Andrew Bailey, will presumably play a&nbsp;key role in preparing the financial sector for Brexit and any regulatory deviations Britain makes after leaving the EU too.</p> <p>Of course, we can never discount the risk of a&nbsp;fresh recession and so the revival of the macro debates. But it’s the quality of microeconomic policy in all these areas that will determine Britain’s long‐​term economic success.</p> <p>With the public finances now healthier and Brexit delivered, Boris Johnson and his big majority in Parliament have a&nbsp;real opportunity in the early 2020s to tackle the smaller, micro‐​level roadblocks to broad‐​based macroeconomic success.</p> </div> Thu, 02 Jan 2020 18:25:01 -0500 Ryan Bourne Robert A. Levy discusses capitalism and other topics on The Bob Harden Show Thu, 02 Jan 2020 13:23:14 -0500 Robert A. Levy Johan Norberg’s article, “The 2010s Have Been Amazing,” is cited on WISN’s The Jay Weber Show Thu, 02 Jan 2020 12:46:36 -0500 Johan Norberg How Economic Liberals Can Win the Tory Battle on Economics Ryan Bourne <div class="lead text-default"> <p>Twelve months is a&nbsp;long time in politics. This time a&nbsp;year ago, journalist Anatole Kaletsky asked: “Is cancelling Brexit now inevitable?” Theresa May had junked a&nbsp;meaningful vote on her backstop‐​laden withdrawal agreement, certain of defeat, but survived a&nbsp;Tory leadership challenge.</p> </div> , <div class="text-default"> <p>Labour was neck‐​and‐​neck with the Conservatives in the polls. Remainers in Parliament saw a&nbsp;path to delaying Brexit for long enough to facilitate a&nbsp;kangaroo‐​court second referendum, preventing the supposed Brexiteer agenda of Britain becoming Singapore‐​on‐​Thames.</p> <p>Now, Brexit by Jan 31&nbsp;looks inevitable. Boris Johnson — a&nbsp;pro‐​Brexit prime minister — is entrenched with a&nbsp;stonking parliamentary majority of&nbsp;80. While the Conservatives are united on Europe, Labour tears itself apart over whether Brexit caused its devastating election defeat.</p> <p>Far from Thatcherism 2.0, Conservative success in working‐​class towns has seen the party embrace higher public service spending, regional regeneration&nbsp;and public infrastructure investment as a&nbsp;platform for government. Singapore‐​on‐​Thames has given way to Taiwan‐​on‐​Trent, in rhetoric if not fully‐​fledged policy.</p> <p>To say the past 12 months have been a&nbsp;whirlwind would be severe understatement. But those interested in a&nbsp;healthy, dynamic, market economy&nbsp;risk letting the relief of avoiding a&nbsp;Christmas socialist revolution mask a&nbsp;warts‐​and‐​all assessment of our current plight.</p> <p>British politics appears locked now in an equilibrium pitching variants of socialism against a&nbsp;new, as yet policy‐​undefined, blue‐​collar Toryism. Electoral dominance for the latter was not and is not inevitable. Only an unusually transformative political figure in Boris Johnson, intent on delivering Brexit, could have increased the Conservative polling numbers by the 20 percentage points seen in recent months.</p> <p>Classical liberal economics — the premise that a&nbsp;free economy, relatively unhindered by government action, tends to deliver high growth and a&nbsp;fairly efficient distribution of resources — is being squeezed out of political life. As politics realigns along cultural divisions, free‐​market capitalists find themselves politically homeless.</p> <p>As Stephen Davies of the Institute of Economic Affairs has outlined, “place” proxies well for their dilemma. Major global cities tend to be cosmopolitan in outlook. But the dominant political manifestations of this outlook are either left‐​wing (globalist, woke left politics and radical green economics) or liberal (in the Scandinavian social democratic sense of taming the free market’s excesses and state‐​delivered economic security).</p> <p>Old towns and rural regions, particularly those “left behind”, find themselves on the other side of the cultural divide — rooted to local communities. But their dominant political manifestations come in desire for active government regeneration and industrial planning, or, even in its most pro‐​market variety, a&nbsp;form of “capitalism in one country”. Those who support free and open markets both at home and abroad might have found aligning with Boris over Corbyn a&nbsp;relatively easy decision, but they worry about the direction the Tories could lean into.</p> <p>On election night, former David Cameron adviser Craig Oliver distilled the shift nicely. Cameron had tried to unite the Tory shires with metropolitan liberals. Now, Boris’s coalition combines the shires with working‐​class towns. A&nbsp;shift from being electorally united on economics and divided on culture to united on culture but divided on economics means the Conservatives’ commitment to existing economic orthodoxies (for good or ill) is no longer assured.</p> <p>A thin manifesto leaves much to play for, hence why groups are limbering to fight for the party’s economic soul. Lest the party fall pray to age‐​old errors — that buying local makes us more prosperous, or subsidising failure generates success, or that industrial planning works — classical liberals in the Tory tribe urgently need to adjust their energies to explain how free‐​market ideas can be pro‐​working class, and how it is central government that often impairs economic opportunity for the regions.</p> <p>They have some policy building blocks already in place. With different electoral economic tensions, the Tory party platform is unsurprisingly a&nbsp;ragtag of economic ideas. But some are pro‐​market. Boris is instinctively anti‐​nanny state, for example. His team has made positive noises towards pro‐​investment tax reform to raise productivity, land‐​use planning reform to improve worker mobility, an expansion of free trade to reduce prices, and freeports to offer a&nbsp;reasonably market‐​friendly way to encourage development in coastal areas.</p> <p>But to prevent other bad interventionist ideas taking hold, pro‐​market types need emphasise a&nbsp;key truth: the higher public service spending Boris desires requires a&nbsp;growing economy. And that can only come sustainably from embracing dynamism and economic change, not insulating industries or regions from it through tariffs, state aid&nbsp;or even preferential taxation.</p> <p>Economic liberty breeds security — at least in the long‐​term — because it facilitates adjustment to new realities. But in the short‐​term, adjustment is painful. What liberal Conservatives need concentrate on is devising policies that work with market signals, using them as a&nbsp;guide for the skills, infrastructure, housing and research policies needed to allow more people to enjoy economic success.</p> <p>That requires economic liberals having a&nbsp;compelling story about how government deters inclusive growth for people in our left‐​behind towns and regions. First, policy constrains the growth of many flourishing cities through bad housing and land use policies, making it more difficult for people in poorer cities and towns to move to new opportunities.</p> <p>It then imposes one‐​size‐​fits‐​all solutions on the country — national minimum wages, national public sector pay bargaining&nbsp;and regional transfers — which, though alleviating hardship in poorer areas, make it more difficult to attract and build new private sector businesses using their competitive cost advantages.</p> <p>Having done that, economic policy power is then centralised further in Westminster, stripping communities of meaningful fiscal tools to encourage private sector development, or incentivise clearing of space for new activity.</p> <p>If free‐​marketeers fail to convince Boris that this should be his focus, and that a&nbsp;pro‐​working class agenda can be centred on growth, devolving power&nbsp;and central government humility, then plenty stand ready to offer up the old, dirigiste ideas of subsidies, protection and throwing money at regeneration. And if a&nbsp;year in politics can be transformative, then five years of such a&nbsp;Labour‐​light agenda could deliver a&nbsp;lot of disappointment.&nbsp;</p> </div> Thu, 26 Dec 2019 18:22:01 -0500 Ryan Bourne The Big Numbers Behind Economic Development Freebies John Mozena, Caleb O. Brown <p>The staggering sums that states and localities spend on economic development subsidies rarely deliver the benefits promised. John Mozena directs the Center for Economic Accountability.</p> Thu, 26 Dec 2019 01:00:00 -0500 John Mozena, Caleb O. Brown Trump’s Decent Record on Regulation (So Far) William Yeatman, Caleb O. Brown <p>For those concerned about the size of the administrative state, there are reasons to be cheerful about the regulatory record of the Trump Administration. Will Yeatman comments.</p> Mon, 23 Dec 2019 13:56:13 -0500 William Yeatman, Caleb O. Brown Boris Doesn’t Need an Ideology – Just Remove the Barriers to Growth Ryan Bourne <div class="lead text-default"> <p>It’s difficult to pigeonhole Boris Johnson’s economic worldview. He&nbsp;<a href="" target="_blank">calls his Cabinet a&nbsp;One Nation government</a>, given its ambition for&nbsp;higher public service spending, regional infrastructure investment and minimum wage increases. His musings on regulation, free trade and the nanny state often sound liberal, if not libertarian.</p> </div> , <div class="text-default"> <p>To confuse matters more, his proposed state aid laws suggest he’s partial to some old‐​school national collectivist thinking too. Anyone hoping for a&nbsp;principles‐​based coherent economic agenda during this Parliament will be disappointed.</p> <p>One concept the prime minister does appear to intuitively understand though is the importance of economic growth. His desire to “unleash the potential” of the country might not be based on theoretical models, like Gordon Brown’s penchant for “post‐​neoclassical endogenous growth theory”.</p> <p>But in acknowledging wealth must be produced before being spent, Johnson understands that growth is the essential precondition for the rising wages, regional levelling‐​up and better public services promised in today’s Queen’s Speech.</p> <p>A legacy of the Blair and Brown era is that we spend inordinate time in politics debating distributional issues, analysing “winners and losers”. Rich are pitched against poor, young against old, North against South. Deficit reduction from 2010 necessitated tough spending choices, adding to this zero‐​sum economic framing in respect of government departments or local government – the idea that one person’s gain must be another’s loss. </p> <p>Yet faster economic growth eases these constraints. It allows “having your cake and eating it,” as Boris might say. An economy growing more quickly means stronger public finances, faster wage growth, and people far less occupied with comparing their spoils. Positive sum, not zero sum.&nbsp;</p> <p>The central economic problem the UK has faced over the past decade is simply too little growth. Whether it was the cause or simply reflective of a&nbsp;past unsustainable trend, the crisis’s aftermath heralded&nbsp;<a href="" target="_blank">a&nbsp;period of dire productivity growth performance</a>.</p> <p>GDP per capita is over 20pc below where it would have been had pre‐​crisis productivity trends continued, with annual growth falling from over 2pc to just over 0.4pc.&nbsp;</p> <p>Forecasters initially predicted a&nbsp;productivity bounceback was just around the corner. But tomorrow never came.&nbsp;Conservative chancellors each year therefore stood at the despatch box to announce weak growth forecasts, before proceeding to do little about it.&nbsp;Then came Brexit.</p> <p>Uncertainty about trading relations and a&nbsp;<a href="" target="_blank">Corbyn premiership has cast a&nbsp;long shadow over investment</a>&nbsp;and location decisions since 2016. Under these and demographic headwinds, we’ve become so depressingly accustomed to weak growth that its absence barely features in public debate. Which is why Boris’s rhetoric is so encouraging.</p> <p>The positive stock market reaction to his victory suggests seeing off Corbyn and the declining probability of a “no‐​deal” Brexit will deliver somewhat of an investment fillip, as Boris claimed. We might also see some near‐​term macroeconomic stimulus, although any investment projects will have muted economic effects given lead times and the likelihood the Bank of England would offset any demand pressure that raised inflation.&nbsp;</p> <p>Given the size of his majority though, the prime minister’s economic ambitions should extend far beyond delivering a&nbsp;short‐​term sugar rush. With unemployment low and migration likely to be curtailed, the scope for GDP boosts from simply adding workers is diminishing anyway. Robust productivity growth is therefore crucial to deliver the tax revenues and wage increases needed to make Boris’s first term a&nbsp;clear economic success.</p> <p>His team know this, and recognise they have a&nbsp;narrow time frame of electoral goodwill to do something about the contentious land‐​use planning regime, for example. Our byzantine mess of a&nbsp;system constrains economically successful areas from growing, especially through green belts.</p> <p>But it also reduces the prospect of certain firms achieving efficient premises scale in industries such as retail, social care and childcare, due to limited space and/​or high rents.</p> <p>There’s obvious pro‐​investment policy the government could opt for, including letting corporations write off spending on buildings and capital equipment immediately against tax.</p> <p>The litmus test of whether Boris is serious about growth will come from how he intends to repay working‐​class towns he won. The political imperative to be seen to “help” may lead to resources thrown at high street, town and hospital regeneration, as tried and failed under New Labour.</p> <p>Hare‐​brained ideas for government schemes to help locals acquire shop space or incentivise them to stay where they were born are already proliferating. This sort of stuff,&nbsp;<a href="" target="_blank">plus attacks on big tech</a>, is just a&nbsp;form of winner to loser distributional politics Boris should avoid.</p> <p>If you tax success to subsidise failure, you’ll end up with more failure.&nbsp;It doesn’t mean nothing can be done. But new interventions or infrastructure should work with market signals, not against them. Removing bottlenecks to growth or joining areas to thriving markets by better transport infrastructure is what works.</p> <p>Given our population density, economic thinkers Stian Westlake and Sam Bowman think the best way to help poor towns’ residents is to remove government barriers to moving while improving connectivity between successful city hubs and close‐​by towns.</p> <p>While Boris does not have an economic ideology then, the sheer size of his majority has given him an opportunity to crack thorny structural economic challenges.</p> <p>There’s a&nbsp;potential future where he is ruthless in eliminating barriers to growth, makes infrastructure decisions to obtain the biggest bang for the buck, broadens our free trading horizons and improves tax incentives to invest.</p> <p>In that world, GDP is somewhat higher, public service pressures are that bit more manageable and economic opportunity has broadened into the regions of his new voters. Now, that’s a&nbsp;potential worth unleashing.</p> </div> Thu, 19 Dec 2019 18:18:04 -0500 Ryan Bourne Alberto Mingardi discusses several topics on Le Fonti TV’s Bucce di Banane e Voli d’Aquila Thu, 19 Dec 2019 12:39:35 -0500 Alberto Mingardi Johan Norberg discusses personality types on Free to Choose Media Wed, 18 Dec 2019 12:09:09 -0500 Johan Norberg Trevor Burrus gives a lecture at the event, “30 Years Later: Real Liberty or New Serfdom?,” hosted by CADI Eleutheria Wed, 18 Dec 2019 12:06:49 -0500 Trevor Burrus Ilya Shapiro’s blog post, “Is Johnson‐​Weld a Libertarian Ticket?” is cited on The Blaze’s The Wonderful World of Stu Fri, 13 Dec 2019 11:23:42 -0500 Ilya Shapiro Randy E. Barnett participates in the event, “Showcase Panel III: Does Originalism Protect Unenumerated Rights?,” hosted by the Federalist Society at the National Lawyers Convention Thu, 12 Dec 2019 12:45:23 -0500 Randy E. Barnett Tanja Porčnik discusses corporate governance of state‐​owned enterprises on TV Slovenija 2 Thu, 12 Dec 2019 11:20:52 -0500 Tanja Porčnik Johnson’s Policy Prospectus Is Tainted by Interventionism, Statism, Collectivism – and Could Be a Lot Worse. Ryan Bourne <div class="lead text-default"> <p>At first glance, prospects for economic liberalism in the UK appear gloomy, whatever tomorrow’s result.</p> </div> , <div class="text-default"> <p>Corbyn’s socialism speaks for itself. But the Conservatives’ slide away from liberal economics continues. Boris Johnson’s last Cabinet, on paper, arguably had the strongest “dry” economic credentials of any since the 19th century. Yet recent announcements for new protectionist state aid laws, “buy British” plans for public bodies, cancellation of corporation tax cuts, and the embrace of government spending as a&nbsp;proxy for public service quality, appear to provide evidence of an ongoing statist shift in the party’s mindset.</p> <p>Many economic liberals feel despair towards both the Conservatives and Labour as a&nbsp;result.&nbsp;<em>The Economist</em>&nbsp;election leader epitomised that reflex. Yes, it acknowledged, Corbyn’s socialism was beyond the pale. But so was Johnson, who’d “accelerated the shift from an economically and socially liberal party into an economically interventionist and culturally conservative one.” By erecting new trade barriers and ending free movement, Brexit is seen by many liberal commentators as anti‐​liberal by definition. A&nbsp;new more working‐​class Tory‐​voting coalition will inevitably change the Conservatives’ electoral offer away from free markets too, so conventional wisdom goes.</p> <p>Should economic classical liberals despair? We certainly should be worried by today’s political currents. But if the polls are right, I&nbsp;think we should also be cautiously thankful for the stay of execution that Johnson’s leadership and manifesto have given us, using that reprieve for some self‐​reflection of our own strategy.</p> <p>Despite claims to the contrary, leaving the EU is not “anti‐​liberal by definition.” Ask Remainers. One of their well‐​worn worries is that the UK outside the EU might become a&nbsp;Singapore‐​on‐​Thames — a&nbsp;low tax economy with light regulations and privatised healthcare. Brexit broadens the range of political possibilities, for good or ill, to include&nbsp;<em>Liberaltopia</em>. Whether a&nbsp;more economically liberal Britain arises depends on how we use those repatriated powers over decades. Brexit is for life, not just for Christmas.</p> <p>Things could be much worse than Johnson in the near term too. Just six years ago,&nbsp;<em>The Economist</em>&nbsp;heralded him as a&nbsp;great social and economic liberal. He’s been a&nbsp;long‐​time champion of immigration, anti‐​the nanny state, a&nbsp;trailblazer in the party for social liberties, and instinctively a&nbsp;low‐​tax Tory. Of course, he’s always had a&nbsp;penchant for big infrastructure projects and high minimum wages — he’s no libertarian. But it’s uncontroversial to believe he’s more liberal than his party, and more liberal than current public attitudes.</p> <p>True, under his leadership, the party has pledged significant public spending increases. But these have been, by and large, highly targeted on frontline public services. To conflate the Conservative drift for higher spending on core government functions after years of restraint with a&nbsp;Labour party intent on delivering the biggest state in our history, confiscating company shares, and renationalising swathes of the economy, is false equivalence. Defeating Corbynism would be economic liberalism’s biggest defensive victory since 1979.</p> <p>Recent Conservatives announcements on state aid and populist lines on migration are more disturbing. But given the broader climate of opinion, we free‐​marketeers might be grateful for small mercies. Johnson is not imbued with a&nbsp;desire to max out the “the good government can do” a&nbsp;la May. His liberal instincts (and those of many around him) are surely why the May tidal wave of new bans has receded and why the manifesto didn’t contain any misguided agenda to “reform capitalism.” Indeed, what we appear to be seeing from Johnson is not a&nbsp;government‐​loving “Borisism”, but a&nbsp;focus‐​group driven agenda — trying to win an election by addressing voter’s stated concerns. And doing so in a&nbsp;zeitgeist inhospitable to free market ideas.</p> <p>Electoral politics doesn’t occur in a&nbsp;vacuum. Politics is the final act. We must therefore avoid concluding from timelines, instead judging Johnson against real counterfactuals. We are in a&nbsp;period where major reform of capitalism is a&nbsp;drumbeat through the pages of the&nbsp;<em>Financial Times</em>. Where Davos men suggest businesses move away from focus on profits. Where rapid decarbonisation, devoid of costs considerations, is taken seriously. Where business groups are unwilling or unable to defend the market economy, even with socialist barbarians at the gates.</p> <p>Such an environment is the product of years of ceding bad arguments to capitalism’s critics, while failing to revise policies that centralise power and make people’s lives worse. Given prevailing conventional wisdom, the real surprise was that the manifesto was not more anti‐​market. When you see Donald Trump’s protectionist agenda, Corbyn’s manifesto, and the demands of new Tory think‐​tanks, Johnson is arguably offering the least possible change consistent with the feelings of the age.</p> <p>Let’s put it another way: is there any other current Conservative MP who is more instinctively liberal than Boris who could have transformed the party’s electoral prospects over the past three months to be close to winning this election? Whatever tomorrow’s outcome, the answer is a&nbsp;bracing one for those who believe in economic freedom.</p> <p>The hard truth we economic liberals must now face is that Britain is once again dominated by collectivist thinking. The Conservatives have been on a&nbsp;very, very slow drift away from market economics over a&nbsp;25‐​year period. Thatcherism proved an interlude in terms of advancement of market‐​based policies. Subsequent years saw those gains defended, but in recent times a “drip, drip” of anti‐​market interventions and proposals has now become a&nbsp;flood of demands for new misguided interventions. Yes, Johnson has let some through. But there could have been many more with a&nbsp;different leader.</p> <p>Whether or not a&nbsp;Conservative majority is secured tomorrow, the UK’s economic liberals need desperately to rethink strategy. First: time, energy, and resources need to be put into the institutions that seek to change the broader climate of opinion, rather than affect near‐​term politics. A&nbsp;naive view that many instinctively held — that with just the right Conservative leader and personnel, economic liberalism would flourish — is clearly misguided. A&nbsp;free‐​market Conservative party will only re‐​appear when there is electoral demand for one. The past four years are an early warning sign.</p> <p>Second, we should be relieved by Boris’s priorities and his manifesto focusing on principles, which leaves opportunities for influence. Johnson has made clear his desire to raise productivity levels and economic growth. He wants to address living costs for poorer families. And he wants to raise investment — both public and private. Economically liberal policies have much to offer here. So after the election, the purer policy‐​oriented think‐​tanks should grasp the opportunity to devise sound economic policy ideas that fulfil such objectives, and work hard to show why other anti‐​market drifts are misguided.</p> <p>Yuval Levin defines conservatism as “gratefulness.” We free‐​marketeers obviously dislike current anti‐​liberal machinations on all sides. But tomorrow we can hopefully be grateful for what we still have.</p> </div> Wed, 11 Dec 2019 18:06:09 -0500 Ryan Bourne Robert A. Levy discusses income inequality and other topics on The Bob Harden Show Wed, 11 Dec 2019 10:35:32 -0500 Robert A. Levy