I’ll do separate posts on my favorite questions, and try to answer the others directly in the comments.  If there’s overlap, I may just answer one version, and leave the rest to your imagination.

P.S. For your convenience, I’m putting links to the whole prior discussion below the fold.

Chapter 1: The Libertarian Heritage: The American Revolution and Classical Liberalism

Chapter 2: Property and Exchange

Chapter 3: The State

Chapter 4: The Problems

Chapter 5: Involuntary Servitude

Chapter 6: Personal Liberty

Chapter 7: Education

Chapter 8: Welfare and the Welfare State

Chapter 9: Inflation and the Business Cycle: The Collapse of the Keynesian Paradigm

Chapter 10: The Public Sector, I: Government in Business

Chapter 11: The Public Sector, II: Streets and Roads

Chapter 12: The Public Sector, III: Police, Law, and the Courts

Chapter 13: Conversation, Ecology, and Growth

Chapter 14: War and Foreign Policy

Chapter 15: A Strategy for Liberty

The post appeared first on Econlib.

Camp #1: Critics who think that Richard, per Rihanna, “is only sorry he got caught.” On this view, Richard is merely pretending to have changed his mind. I told the interviewer that this is a reasonable presumption. If I didn’t personally know Richard well, I would, though mindful of his pre-expose pro-immigration pieces, still wonder about his sincerity. But since I do know Richard well, my response was, “If he’s faking, give him an Academy Award.” While I sadly lack telepathy, I’d be amazed if straight-talking Richard could keep up a multi-year facade.

Camp #2: Critics who think that Richard is still blatantly and by definition racist because he believes in racial differences in IQ, personality, criminality, and beyond. For some critics, even looking at the numbers is suspect. To ponder the possibility that the differences are anything other than a natural response to white racism is practically satanic. While I was tempted to dismiss these critics as crazed fanatics, the conversation made me realize that the issue is more subtle. True, simply believing in racial differences — even large genetic racial differences — is never racist. Expressing these views, however, often is a strong symptom of racism.

The most blatant example in my mind: Whenever someone broaches the subject of sub-Saharan African IQ, they often start casually advocating horrific human rights violations. As I explained a decade ago:

In my experience, if a stranger brings up low IQ in Africa, there’s about a 50/50 chance he casually transitions to forced sterilization or mass murder of hundreds of millions of human beings as an intriguing response. You can protest that they’re just trolling, but these folks seemed frighteningly sincere to me.

Given this high psychotic base rate, the correct Bayesian inference is that broaching the subject of low sub-Saharan IQ sharply raises the probability that you are racist in the worst sense, even if the speaker never personally advocates forced sterilization or mass murder. After all, for every ten people who broach the subject and immediately voice openness to human rights violations, there must be a few people who broach the subject while glossing over their openness to such violations.

More generally, expressing belief in racial differences becomes a strong symptom of racism in two common conditions.

Condition #1: Misanthropic tone. If a low-IQ student is failing a class, you can regretfully but candidly tell him, “Given your test scores, I’m afraid you’re never going to become a mathematician or a scientist.” Or you can gloat, “You, a scientist?! But you’re a freakin’ moron!” The same goes for racial differences. You can regretfully but candidly acknowledge them: “Blacks commit murder at about 7.5 times the white rate, so high black incarceration rates for murder are just what you should expect.” Or you can gloat, “Blacks?! They’re all a bunch of murderous thugs!” The key point: Unless you are in fact a racist, there’s nothing funny about these gruesome facts. And unless you’re a racist, it’s easy to grasp why you ought not gratuitously lump the vast majority of non-murderous blacks in with the merely relatively large murderous minority.

Condition #2: Time and place. If a low-IQ student is failing in school, his teacher could talk to him privately about realistic career options: “Do you know how much money skilled craftsmen make?” Or he could humiliate him in front of his peers: “After graduation, Johnny’s gonna be pumping gas for the rest of you.” The same goes for racial differences. If you’re giving a lecture on racial discrimination in Econ 321, racial IQ differences are fair game. The classroom is a forum for well-reasoned discussion of statistical reality, and IQ is in fact a major cause of racial earnings disparities. But if you decide to raise the same topic at a mixed-race wedding, your motive is clearly to humiliate and antagonize. It’s like loudly speculating about the couple’s probability of divorce. People are at the wedding to celebrate, and you’re going out of your way to tarnish attendees’ experience. If you weren’t a racist, why dredge up this topic in this situation?

Granted, inferring motives from words is a struggle. Misunderstandings abound. That’s what makes Curb Your Enthusiasm such a deep show. Larry David repeatedly makes misanthropic remarks at the wrong time and place, leading others to judge him an even worse person than we, the all-seeing viewers, know Larry to be. But inferring motives from words is a two-front struggle. You have to infer neither too much nor too little from what people say, how they say it, when they say it, and where they say it.

What does all this mean for Hanania? Long-form writing is the ideal forum for well-reasoned discussion of racial differences. And his long-form tone for the last decade, though occasionally acerbic, is almost never misanthropic. On the contrary, Richard strives to nudge readers into being better people. Since I read almost every word he writes, I confidently exonerate him of racism for anything he says in essays or books.

His Twitter/X posts, by his own admission, are in contrast often calculated trolling for clicks. While you could argue that Twitter/X isn’t meant to be taken seriously, I see why some of Hanania’s bon mots raise red flags of racism for readers. Since I know him personally, I discount these flags. But yes, if Hanania wanted to allay all rational suspicion of his racism, he would have curated his social media more closely, especially pre-2024.

I have a dream. I dream of a world where well-informed people calmly and candidly discuss society’s ugliest statistical realities. I dream of a world where no one stigmatizes those who participate in these discussions as “racist” (or “sexist,” “homophobic,” “xenophobic,” “anti-Semitic,” or “Islamophobic”). I dream of a world where everyone in these discussions speaks respectfully about all of the groups under consideration. I dream of a world where the point of these discussions is to help craft humane tailored policy responses, not rationalize collective punishment or bless the status quo. Above all, I dream of a world where all participants are mindful that individual exceptions to statistical rules are ubiquitous. The hashtag #NotAllX is never far from the thoughts of any intellectually honest person.

How can I say such a thing? This is the basic economics of crime. Solving and prosecuting all murders would be astronomically expensive. Some murders virtually solve themselves, others require the proverbial 48 hours, others require years of police work, and others might remain unsolved even if the entire NYPD indefinitely focused 100% of its attention on the crime. About 70% of murders committed in NYC currently end in a conviction, but the NYPD couldn’t get to 100% even if they had 100% of the city’s GDP to deploy.

Astronomical expense aside, however, stricter enforcement means more false positives. The easiest way to punish every murderer is to lower the burden of proof. But the lower the burden, the more innocent people you end up punishing. Bukele offers a clean demonstration: He got El Salvador’s murder rate below 2 per 100,000 by treating facial tattoos as a sufficient reason for indefinite imprisonment. He could probably get it down to .2 per 100,000 by imprisoning every male between 15 and 40 years old. But if he wanted to imprison every murderer, even that crazy policy would not suffice.

Deporting all illegal aliens currently residing in the United States has exactly the same insuperable problems. The cost would be astronomically high, probably exceeding total GDP because the goal is impossible to achieve. And even if it could be achieved, there would be massive collateral damage along the way. You can also think about it like this: To deport every illegal alien, you would have to deport everyone with a 50%, a 10%, or even a 1% chance of being an illegal alien. Otherwise, you will miss some.

Once you accept these two obvious-once-you-think-about-them facts, you really are obliged to vote nay. You’re obliged to vote for me even if you think that an illegal immigrant is as bad as a murderer! But since I have ten minutes left, I’m going to add a bunch of extra arguments to reinforce the conclusion. And along the way, I’m going to tell you exactly what I really think.

To start: Murderers are obviously worse than illegal immigrants. Much worse. Draconian tactics that might be justified against the heinous crime of murder are definitely not justified against people who peacefully live and work in the U.S. without proper paperwork. Everyone here has failed to obtain proper paperwork on occasion. Remember Covid? If it’s perfectly fine to do something with paperwork, it can’t be very bad to do the same thing without paperwork.

I know that many people reply, “The law is the law.” This is obviously a bizarre position for libertarians, who routinely cheer scofflaws — and are often scofflaws themselves. But on reflection, “Always follow the law” is a bizarre position from almost any point of view. If a law is totally evil, then it’s fine to break it and wrong to enforce it. I suspect my opponent agrees, but we’ll find out soon enough.

What’s more striking: Normal human beings don’t just guiltlessly break totally evil laws. They also guiltlessly break laws that are merely mildly stupid. Unless you’ve never driven a car, you’ve broken the speed limit. And unless you never drive again, you’re going to break the speed limit again. When you mail order from other states, you’ve almost certainly failed to pay use tax. And unless you never mail order again, you’re going to fail to pay use tax again. This isn’t mere hypocrisy, because you don’t condemn others who break the same mildly stupid laws that you do.

So what? Well, a law that forbids a person from living in the United States and having a job is, at minimum, mildly stupid. Why should anyone on Earth need permission from the U.S. government to wash dishes, clean toilets, or take care of kids? Work is good. Production is good. No one should need the permission of any government to work, to produce. If you think it’s OK to break a law against driving 56 mph in the desert, you should think that it’s OK to break a law against mowing grass for money.

On further reflection, though, laws against foreigners living and working here without government permission are worse than mildly stupid. Even unreasonably strict speed limits are only a minor inconvenience. Immigration laws, in contrast, are a terrible burden on everyone without the good fortune to be born a citizen of the First World. Standard estimates say that moving from the Third World to the First World multiplies migrants’ incomes by a factor of 5x, 10x, or 15x. The flip side is that successfully enforcing immigration laws divides migrants’ incomes by a factor of 5x, 10x, or 15x. That is a terrible thing to do to another human being just for doing a normal job without proper paperwork. Imagine if the U.S. government passed a law that divided your income by a factor of 10. It would be a massive harm, and almost everyone — not just libertarians — would demonize not people who broke this law, but those who enforced it.

I previously debated immigration at LibertyCon right after the release of Ross Ulbricht. The attendees were overjoyed that the founder of the Silk Road was out on the street. So was I, but I understand the other side. So what? Simple: It’s very odd to support an American’s right to sell narcotics and weapons on the dark web, but not a foreigner’s right to wash dishes and pick vegetables on a U.S. farm.

I know that some libertarians view illegal immigration as trespassing, so it’s a serious offense after all: “You can’t live in my house without my permission, so you can’t come to the U.S. without the U.S. government’s permission.” But this only makes sense if you accept the socialist view that U.S. government is the true owner of the whole country. Otherwise, all that matters is that the immigrant’s employer and landlord welcome him, which they naturally do. And if you’re still tempted by the parallels between private and public property, note that you also aren’t allowed to set up a business, open a church, or have a baby in a house without the owner’s permission either. Truly, this so-called “libertarian” argument logically opens the door to full-blown totalitarianism.

I am well aware that people have many complaints about immigration in general, and illegal immigration in particular. But none of these arguments remotely justify deporting people who are merely living and working here without government permission. If they’re actually committing violent or property crimes, punish them like anyone else. If you’re worried about welfare state dependence, take comfort in the fact that illegal immigrants are not only ineligible for most benefits, but have already paid hundreds of billions of dollars in taxes using invalid Social Security numbers on which they will never collect. This is why Milton Friedman, despite his famous quote about the impossibility of open borders in a welfare state, specifically praised illegal immigration.

What should be done about illegal immigration? Simple: We should make it legal. A massive apology would also be nice, but I don’t ask for miracles. What about all of the problems caused by mass immigration? They’re minor compared to the massive gains of moving hundreds of millions of workers from countries where their productivity is low to countries where it is high. If you’re still worried, then adopt the massively successful immigration policies of countries like the United Arab Emirates, almost 90% foreign-born, which welcomes immigrants of all skill levels to live and work, but not to receive government benefits or participate in politics. Statists call this slavery, but that’s utter nonsense. People around the world voluntarily move to the Emirates by the millions, because they make five times as much money in the UAE as they do at home.

But to repeat, even if you disagree with every favorable thing I’ve said about immigration, you have to vote for me. Why? Because my opponent agreed to defend an indefensible resolution. Even if you think illegal immigration is as bad as murder, trying to deport all illegal immigrants is doubly absurd. Achieving 100% deportations would be unbelievably expensive. In fact, it would take more resources than exist on Earth. And to get to 100%, you would have to accept sky-high levels of false positives. To repeat: You can’t deport every illegal immigrant unless you’re willing to deport everyone with a greater than 0% chance of being an illegal immigrant. That’s not pro-immigration advocacy. It’s basic logic.

On one point there can scarcely be disagreement: a prime and necessary condition for libertarian victory (or, indeed, for victory for any social movement, from Buddhism to vegetarianism) is education: the persuasion and conversion of large numbers of people to the cause.

Rothbard then advises libertarian strategists to absorb the Marxist distinction between “left-wing sectarianism” and “right-wing opportunism.”  Both are grave errors.  Left-wing sectarians refuse even to discuss moderate pro-liberty moves, leading to severe intellectual isolation; right-wing opportunists lose sight of the final goal of liberty, and end up abandoning libertarian principles.

When Rothbard gets more specific, many readers may be tempted to say that he is one of the left-wing sectarians that he criticizes.  His two guiding rules:

(1) that, whatever the transitional demands, the ultimate end of liberty be always held aloft as the desired goal; and (2) that no steps or means ever explicitly or implicitly contradict the ultimate goal.

Example:

The libertarian looks forward to eventual abolition of taxes. It is perfectly legitimate for him, as a strategic measure in that desired direction, to push for a drastic reduction or repeal of the income tax. But the libertarian must never support any new tax or tax increase. For example, he must not, while advocating a large cut in income taxes, also call for its replacement by a sales or other form of tax.

Rothbard then fleshes out his educational strategy.  Statist elites – including most big businessmen – are a lost cause; as he memorably asks, “How much likelihood is there that the President of the United States will read this book, or any other piece of libertarian literature, and then exclaim: ‘They’re right. I’ve been wrong. I resign.’?”  But almost everyone else has potential, especially campus youth, the media (!), “Middle America,” and small businessmen.

Next, Rothbard argues that libertarianism is going to win “in a remarkably short period of time.”  Why?  Because “only freedom and a free market can run an industrial economy,” and “the masses [will] not permit such a drastic reversal of their expectations for a rising standard of living.”  Even “the Communists themselves have increasingly perceived that socialist central planning simply does not work for an industrial economy,” so they’re rapidly moving in a free-market direction.

The book concludes with a remarkable feat of political eloquence, with words that make converts and sustain them for a lifetime of activism:

The enormous success of Karl Marx and Marxism has been due not to the validity of his ideas — all of which, indeed, are fallacious — but to the fact that he dared to weave socialist theory into a mighty system. Liberty cannot succeed without an equivalent and contrasting systematic theory; and until the last few years, despite our great heritage of economic and political thought and practice, we have not had a fully integrated and consistent theory of liberty. We now have that systematic theory; we come, fully armed with our knowledge, prepared to bring our message and to capture the imagination of all groups and strands in the population… Liberty has never been fully tried in the modern world; libertarians now propose to fulfill the American dream and the world dream of liberty and prosperity for all mankind.

Critical Comments
If you know much about the history of Marxism, it’s striking that Rothbard so eagerly adopts the Marxist “left-sectarian/right-opportunist” distinction.   As you can see in e.g. Franz Borkenau‘s World Communism, this distinction was the foundation for Marxists’ ceaseless witch-hunting and sudden Orwellian strategy shifts:  “Oh no, we’ve got to root out left sectarianism!  Wait, now we’ve got to smash opportunism!  Uh oh, the sectarians are back — get ’em!” 

If you read Raimondo’s highly sympathetic biography of Rothbard, you can see decades of analogous gyrations — an endless series of failed alliances and broken friendships.  If that doesn’t convince you that the strategic “insights” of the Marxists aren’t worth learning, I don’t know what will.

My alternative strategy: Personal integrity plus a big friendly tent.  If you think that a compromise is wrong, oppose it.  Try to change other libertarians’ minds about it.  But when people in broad agreement with you aren’t convinced, don’t purge them.  It’s foolish and wrong.  Indeed, it’s usually foolish and wrong to purge people even if they aren’t in broad agreement with you.  Friendliness not only makes you more persuasive; it keeps you honest, because people won’t be afraid to tell you why you’re mistaken.

In other news, Rothbard’s argument for the imminent triumph of libertarianism is far weaker than it appears.  Yes, Communism collapsed — but the collapse was political, not economic.  In any case, though, social democracy and a modern industrial economy can clearly co-exist.  Indeed, social democracy isn’t even bad enough to prevent moderate economic growth.  Contrary to Mises, the “reserve fund” that allows governments to pursue inefficient policies hasn’t been “exhausted.”  It’s bigger now than ever, because we’re richer now than ever.

I’d like to believe that liberty is coming in my lifetime.  There are important cases where I think it will.  China is going to be much freer in 30 years — I’ll bet on it.  Unfortunately, though, I don’t see any reason to expect Western social democracies — including the U.S. — to get freer anytime soon.  Economics gives us strong reasons to expect the world to keep getting richer.  But political economy does not give us comparable reasons to expect the world to keep getting freer.

Still, I admire Rothbard’s optimism.  To make optimism intellectually respectable, though, we need to transform it from a prediction to an attitude.  Counting your blessings is good; imagining blessings that aren’t going to happen isn’t.  When I look at the modern political landscape, for example, I don’t despair.  Instead, I weigh contemporary problems against e.g. the collapse of the Soviet bloc, and reasonably say, “The world is still far freer than any sensible person would have expected in 1985.  Yay!”  Similarly, when I look at the statism of public opinion, I often breathe a sigh of relief that democracy hasn’t destroyed modern civilization.  By historical standards the world is amazingly free, rich, and creative.  Why shouldn’t I be optimistic about that?

The post appeared first on Econlib.

Dear Professor Caplan,

My wife and I are long-term residents of Japan on renewable visas. We typically renew every one to three years. Until now, the fee has been roughly $40 USD (¥6,000), which was modest. However, the administrative hassle and uncertainty involved have always been significant.

The Japanese government recently passed a law that will dramatically raise these renewal fees — by roughly 5 to 7 times for most people. The new fees are expected to range from around $200 to $600 USD depending on visa length and category, with some cases potentially going even higher.

As someone who has written extensively about immigration policy, I thought this development might interest you. Japan has traditionally been very restrictive on immigration, and this large, sudden cost increase on existing legal residents could serve as a revealing real-world test case. It will be interesting to observe its effects on skilled workers, family formation, economic contributions, and public attitudes toward immigration.

I greatly appreciate your clear and principled work on open borders and immigration economics. Thank you for everything you do.

Best regards, [redacted]

To which I replied:

Even $600 is a rounding error compared to the earnings a janitor makes in Japan versus the Philippines, no?

Which led to a rather fascinating response, which I run in its entirety with the sender’s kind permission.

Totally a rounding error. My wife is from the Philippines and I’ve lived there for 2 years a couple of time. I’ll include two wonderful pictures of us at the end of this email. My wife went to nurse assistant school in the Philippines with 3 lady friends. Her friends work hard 10-12 hour shifts and make about 450 pesos per day, that would be about $7 for a long hard day as a nurse assistant. When my wife got here I emailed her resume to all the hospitals within 1km, two got back to me right away and she was hired within a week despite speaking no Japanese.

Also we lived way outside Tokyo so this is not just like some sort of zero cost of integrating into the system thing. It was a huge amount of extra work mentally on everyone to get her into the job and working smoothly. But she was undoubtedly productive at that hospital and worked there until all the lockdowns and stuff, of course. She made the starting salary of 1400 yen per hour which is about $8.50 an hour. My math shows she started off making about 10 times the salary for doing the same job and everyone was happy. Little bit of stress on everyone to integrate her into the hospital but it was fine.

The numbers add up to exactly what you cite in larger studies. It matches my real-world experience living away from the cultural zoo enclosure that most country capitals tend to be. I guess it’s just one more huzzah for the generally exactly correct thing that you say all the time in your writings. I appreciate that.

My hope is a bright side of the increased cost of the visa will be there isn’t so much damn stress about if it gets approved. Our life is always on a damned knife edge because we would have to totally give up our lives if we suddenly had to move back because of our visas not being renewed. That aspect of this whole thing is never brought up enough in my opinion.

Have a wonderful day. If you get to Japan again I’ll happily buy you and your boys some Yoshinoya in Kawasaki.

The plight of young lonely singles (particularly single men) is once again in the news. Back in 2022, I wrote a Facebook post about how people seeking relationships, but failing at it, can improve what might be called their dating strategy. I was inspired to do so by Bryan Caplan’s discussion of Scott Alexander’s “rationalist” approach to dating. I recently reupped the post, and Bryan Caplan asked if he could reprint it on this substack. What follows is a modestly revised version of what I wrote, which I hope might be helpful to people in the same situation that I once found myself in.

I will start by noting I am not an academic expert on dating and relationships, nor am I any kind of professional dating guru. Far from it. But what I learned may be useful to some people, in part for those very reasons. If I could make this strategy work, the same may be true for others.

It so happens that, like Scott Alexander, I too didn’t get married till I was 37, and I too needed a “rationalist” approach. I was a near-total failure with the opposite sex until I decided to take exactly that approach to the issue when I was around 27. It took time to work. But it fundamentally transformed this aspect of my life - culminating in the good fortune of meeting my future wife (Alison Somin) in 2008.

I studied both the academic literature on dating, and the popular/self-help literature. Both had useful insights that I implemented. Yes, I know, it’s an unromantic, nerdy way of proceeding. But, for those lacking in natural social skills and charisma, it can be a lot better than the alternative.

Friends sometimes say I should write a book about this topic. It would probably sell better than my actual books, but no such work is in the offing. Still, here are a few things I learned that may be of value to others in the same boat where I was back then:

1. Think carefully about exactly what you want, and what qualities are essential in a partner, and which ones less so. Are you looking for a short-term relationship, or a more permanent one? Is it essential that the other person share your religion and/or your political views, have various common interests, and so on? If you’re looking to get married, do you want kids, and how many? It’s best to ask these kinds of questions in advance. If you know what you’re looking for, you’re more likely to find it, and less likely to waste time, or end up in a dysfunctional situation.

2. Scott Alexander is right that dating is a numbers game. The more opportunities you take to meet people and ask them out, the more likely you are to succeed. Plus, doing these things repeatedly improves your skills! You may be surprised at how much. On-line dating apps, social events, events related to your interests, and much else are all opportunities to increase your odds, and improve those skills. I met my future wife at a party sponsored by an academic organization we had both won fellowships from. I went to that event in large part because I thought it would be another opportunity to increase the odds of meeting the right person. And so it was!

3. As a corollary to point 2, you have to get used to dealing with rejection. Unless you’re a famous athlete, actor, rock star, or other type of celebrity (maybe even if you are), some people you ask out are going to say “no,” or just ignore you. Move on and keep trying. One success more than offsets numerous setbacks. Plus, each setback can help improve your skills. Rejection at online dating websites should be particularly easy to accept. Don’t set too much store by what a person who’s never met you or seen you decides. Plus, they might reject or ignore you for reasons having little or nothing to do with you, such as they aren’t monitoring their account on that site, they recently started a relationship with another person, and other such things.

4. Social science research shows that women, particularly highly educated ones, care a lot about the education credentials of men they might potentially date. Friends had advised me that I should not put down on dating site profiles that I have degrees from Harvard and Yale (it would look pretentious, they said). After I read the research, I ignored my friends’ advice and put this stuff in the profiles - modesty be damned. Right away, the number of favorable responses on those sites increased! You can argue women are being superficial here. I actually think this kind of selectivity can be rational behavior, given constrained information. Regardless, it’s worth taking account of. Read up on what women want (or men, if that’s who you’re focusing on), and then make sure people know you have it. When you do, that is - I’m not advocating deception!

5. On average, women prefer men who are self-confident and know what they are doing, or at least seem to. Don’t act shy and apologetic when starting a conversation and/or asking someone out - even if that’s how you feel (it’s certainly how I often felt!). As they say in sports, “act like you’ve been there before.” Don’t take this to the point of being an arrogant jerk, which is both bad in itself, and tactically unwise. But even coming off as a jerk is less likely to sink your chances than coming off as a loser who believes he’s unworthy of the other person’s attention.

6. Related to point 5, if the woman says “yes” to a date, be prepared with a plan for what to do! Being a “man with a plan” is better than putting the onus on the woman to come up with one, and helps further convey the message that you are confident and know what you’re doing. You can say this relies on sexist assumptions. Why shouldn’t women have to do an equal share of date planning? I don’t disagree, in theory. But, at least in my experience (and self-help experts say the same), having a plan works better than asking the other person to come up with one, and certainly better than giving her a lecture on how feminist theory requires her to do the planning. But if the woman says no to your plan and suggests her own instead, by all means do it (within reason)! This happened only a few times in my experience, and saying “yes” was the best approach every time.

There’s much more to be said. A book could indeed be written about it. I actually did expound on these issues in a bit more detail in a 2023 Strangers on the Internet podcast, with legal scholar Irina Manta and psychologist Michelle Lange (they invited me after reading my original 2022 post).

But the above is at least a potentially helpful start. I will add that none of this advice will turn you into Casanova. The point is not to come up with a fool-proof strategy for success, but to give yourself a fighting chance.

Finally, I recognize some of the above points are mainly useful to men seeking women rather than vice versa. Obviously, I know more about the former than the latter. But there’s a lot of info out there on both scenarios (and on dating strategy for gays and lesbians, too). “Rationalism” can work for you regardless of gender and sexual orientation! That said, I do warn that the academic literature on what men (on average) look for in women probably won’t make your view of human nature more optimistic.

To understand Jones’ twin projects, you must first understand the incredible potential upside of open borders — a world where anyone can legally take a job anywhere. Fact: If a rich country like the United States allows a low-skilled foreigner from a Third World country to move here and work, his earnings almost instantly multiply by a factor of 5x, 10x, or even 15x. This is easy to visually verify, and the best statistical analysis confirms the obvious: any maid, gardener, or janitor from Haiti or Nigeria will leap from earning one or two thousand dollars a year to earning $15,000 or $30,000 a year. The reason, as usual in labor markets, is not employer charity, but worker productivity. Almost everyone is vastly more productive in the First World than in the Third World: The same farmer grows much more food, the same factory worker produces many more products, the same service sector worker saves much more valuable time.

The only intellectually challenging question is not whether immigration vastly multiplies an individual’s productivity, but whether this multiplication is scalable. Sure, handing out one work permit to one more person dramatically enriches humanity, and the same goes if we hand out 100 or 1000 work permits. But what if we hand out a million? Ten million? A hundred million? If this multiplication is fully scalable, simple math says that open borders would roughly double humanity’s Gross World Product. And while the critics of economics have long faulted us for reducing everything to GDP, economists have long had a mighty response: Virtually everything good — health, longevity, safety, leisure, civility, peace, culture, and more — goes hand-in-hand with GDP. To use Michael Clemens’ slogan, scalable mass migration looks like “trillion-dollar bills on the sidewalk” — an incredible opportunity that Western democracies stubbornly refuse to pick up.

Scalability is therefore the key question. The lazy objection is to summarily dismiss this as silly Ivory Tower theory. But Gulf monarchies like United Arab Emirates, which have gone from medieval poverty to futuristic opulence in a single lifetime, show that the potential gains of mass migration are totally real. Yes, the Gulf monarchies were rich in mineral wealth, but it was only by the power of sky-high migration — UAE is now almost 90% foreign-born — that they were able to take advantage of this opportunity.

The better objection is that the open borders also brings big cultural and political costs. Benevolent dictatorships may be able to defuse these downsides, but Western democracies somehow can’t. The subset of social scientists who recognize the incredible upside of immigration yet fear open borders normally appeal to these cultural and political costs. The problem is that the gains of immigration are so astronomical that we should happily endure big cultural and political costs to capture these gains.

The reason that Garett Jones towers above the other critics of immigration is that he tries to show that these cultural and political costs are not just big, but even more astronomical than the benefits. In Hive Mind, he shows that people from poor countries have low average IQ, and that average national IQ has a massive effect on nations’ GDPs. This effect is much larger for nations than for individuals, plausibly because low IQ does indirect cultural and political harm as well as direct economic harm. Estimated magnitude: If everyone on Earth moves to the United States, average IQ falls from 98 to 87, reducing U.S. GDP per-capita by 49%. But on closer examination, this does not show that the immigration is a net negative! On these assumptions, total Gross World Product still rises by 81%, roughly the same as the Clemens calculation that open borders would double the production of humanity.

What would this mean in practice? Specialization and trade between higher- and lower-IQ people. Higher-IQ people — disproportionately current citizens of the First World — would specialize in high-skilled work, especially management and entrepreneurship. Lower-IQ people — disproportionately current citizens of the Third World — would specialize in low-skilled work, especially basic services. This is the same logic as any well-run business: Google doesn’t hire college grads as janitors — but it has plenty of janitors.

Jones replied to this critique. He accepts my math, and objects simply that incomes will be too equal for current citizens of the First World to profit. As a result, foreigners reap more than 100% of the massive gains. But this is a bizarre position on many levels. General problem: In all of economic history, it is basically impossible to find any time large productivity gains were not widely shared. The Industrial Revolution did not just enrich factory owners, and the internet did not just enrich programmers. Specific problem: Jones’ reply assumes that the private payoff for intelligence stays the same even if the relative supply of high intelligence crashes. This is deeply implausible and contradicts the facts from countries where IQ inequality is high.

And even if my whole reply to Jones’ critique is wrong, Hive Mind strongly implies that the U.S. should eagerly welcome any migrant with an IQ of 98 or higher, which is well over a billion people worldwide.

Moving on: Jones’ more recent book, The Culture Transplant, presents another mechanism for the indirect costs of immigration to be massive enough to exceed immigration’s direct benefits. This “ancestry” or “SAT” (state history, agriculture, and technology) story is much harder to swiftly explain than his IQ story, so I’ll leave that task to him. Instead, I’ll point out the main issues with this work:

First, Jones doesn’t show that ancestry is an additional problem on top of IQ. And if you look at his data, this is a massive oversight. Why? Because the East Asian countries that famously grew rich despite some mediocre ancestry scores (specifically for his “Tech in 1500” measure) are all high IQ.

Second, if you repeat my previous thought experiment of moving the whole planet to the U.S., Jones’ estimates imply that GWP will more than double. Why? Because the ancestry scores of the United States are mediocre.

Third, contrary to Jones, immigrant assimilation is obviously high. Anyone who personally knows first-generation immigrants and their children sees this with their own eyes. American culture is so globally dominant that much of the world has already pre-assimilated to our language and way of life without ever setting foot in the country.

Last, Jones’ The Culture Transplant strongly implies that we should welcome all migrants with ancestry scores exceeding our own. Which, by most of his measures, turns out to be over two billion people.

There’s no time to respond to the countless other complaints about immigration, but here’s my general approach. I dismiss all vivid anecdotes as demagogic distractions. If you hear a story so juicy you’re dying to repeat it to “prove your point,” don’t. In contrast, if you’ve got ugly numbers, I’m happy to hear them. But before we act on these numbers, we should always remember the truly massive economic gains of immigration. Immigrant crime, welfare dependence, and so on are sometimes notable problems, but they’re rounding errors compared to the gains. There’s more to life than GDP? Sure, but GDP and almost everything else good go hand in hand.

Closing point: Since I’m at UATX, I fear that many listeners will dismiss pro-immigration views as “woke.” I have zero sympathy for woke philosophy; in fact, I’m the sole professor at my university who was willing to criticize the theory and practice of wokeness before our Board of Visitors. Still, even a woke clock is right twice a day, and I’m grateful that woke activists have loudly pushed back against recent anti-immigration policies.

That said, there are two night-and-day differences between immigration and every other notable woke cause. First, free immigration and meritocracy go hand in hand. You don’t have to pass laws to scare employers to hire and promote immigrants; in fact, you have to pass laws to scare employers to not hire and promote them. Second, immigration enforcement is the opposite of a “microaggression.” Governments around the world really do treat immigrants like criminals simply for trying to live and work without the right paperwork — paperwork that is almost impossible to obtain. If the critics of wokeness really stand for meritocracy and against brutal violations of basic human rights, they should be as pro-immigration as I am.

Pending the dissolution of States, libertarians desire to limit, to whittle down, the area of government power in all directions and as much as possible… In foreign affairs, the goal is the same: to keep government from interfering in the affairs of other governments or other countries. Political “isolationism” and peaceful coexistence–refraining from acting upon other countries–is, then, the libertarian counterpart to agitating for laissez-faire policies at home. The idea is to shackle government from acting abroad just as we try to shackle government at home. Isolationism or peaceful coexistence is the foreign policy counterpart of severely limiting government at home.

But couldn’t one government’s military actions increase human freedom?  Not in a morally permissible way.  Suppose, he asks, that the imaginary nation of Walldavia tries to defend the freedom of Belgravia against an invasion from Graustark?  It’s still wrong:

[W]hen Walldavia, or any other States, leap into the fray [they] are themselves expanding and compounding the extent of the aggression, because they are (1) unjustly slaughtering masses of Graustarkian civilians, and (2) increasing tax-coercion over Walldavian citizens. Furthermore, (3) in this age when States and subjects are closely identifiable, Walldavia is thereby leaving Walldavian civilians open to retaliation by Graustarkian bombers or missiles. Thus, entry into the war by the Walldavian government puts into jeopardy the very lives and properties of Walldavian citizens which the government is supposed to be protecting. Finally, (4) conscription-enslavement of Walldavian citizens will usually intensify.

After laying out this hard-line, Rothbard defies Cold War orthodoxy.  The U.S. is no hero: “empirically, taking the twentieth century as a whole, the single most warlike, most interventionist, most imperialist government has been the United States.”  And despite its monstrous domestic policies, Rothbard argues that the Soviet Union’s foreign policies haven’t been all that bad.  Lenin pioneered the theory of “peaceful coexistence,” and…

As time went on, furthermore, this policy was reinforced by a “conservatism” that comes upon all movements after they have acquired and retained power for any length of time, in which the interests of keeping power over one’s nation-state begins to take more and more precedence over the initial ideal of world revolution. This increasing conservatism under Stalin and his successors strengthened and reinforced the nonaggressive, “peaceful coexistence” policy.

What about the Nazi-Soviet pact and the Red Army’s later occupation of Eastern Europe?  Rothbard’s unimpressed.  The Nazi-Soviet pact was merely an attempt to restore Russia’s pre-WWI borders, and its post-war expansion was just a byproduct of the Soviets’ defensive war against the Nazis:

[I]n order to defeat the invaders, it was obviously necessary for the Russians to roll back the invading armies and conquer Germany and the other warring countries of Eastern Europe. It is easier to make a case for the United States being expansionist for conquering and occupying Italy and part of Germany than it is for Russia’s actions–after all, the United States was never directly attacked by the Germans.

While he condemns the later Soviet invasions of Hungary and Czechoslovakia, Rothbard insists that the broader world should not feel threatened by them:

Their only use of troops has been to defend their territory in the Communist bloc, rather than to extend it further. Thus, when Hungary threatened to leave the Soviet bloc in 1956, or Czechoslovakia in 1968, the Soviets intervened with troops–reprehensibly, to be sure, but still acting in a conservative and defensive rather than expansionist manner.

Rothbard closes the chapter with a defense of multilateral disarmament:

Not only should there be joint disarmament of nuclear weapons, but also of all weapons capable of being fired massively across national borders; in particular bombers. It is precisely such weapons of mass destruction as the missile and the bomber which can never be pinpoint-targeted to avoid their use against innocent civilians…If it is illegitimate for government ever to employ such weapons, why should they be allowed to remain, fully loaded, in their none-too-clean hands?

Critical Comments
Rothbard’s deduction of isolationism from libertarianism is basically correct.  The main slippage is his insistence that libertarians focus on limiting the crimes of their own government.  What if your own government is relatively benign, and another government is murdering millions?  Mightn’t it make more sense for libertarians to focus their protests on the greater evil, even if it is further away?

In purely consequentialist terms, too, isolationism deserves a lot more credit than it gets.  WWII, widely seen as the proof of the necessity of an active foreign policy, left half of Europe under Soviet rule, and put Mao Zedong, the century’s greatest murderer, on the Chinese throne.  Is that what counts as “American success”?  In a similar vein, it seems likely that the U.S. wouldn’t have to worry about terrorism if it had simply stayed out of the Middle East altogether.

When it comes to his Cold War revisionism, though, Rothbard let his hatred of the U.S. government blind him to the relative benevolence of U.S. foreign policy and the absolute malevolence of the Soviet Union. 

When I was eighteen years old, I met Rothbard and challenged him on these questions.  He basically told me to go read some actual history.  I followed his advice, reading most of his favorite New Left historians.  I wasn’t impressed.  Furthermore, the more I read about the history of the Communist movement, the more I realized that Lenin and Stalin really did command an international totalitarian conspiracy of unthinkable proportions.  I particularly recommend Franz Borkenau‘s World Communism and Burnett Bolloten’s The Spanish Civil War: Revolution and Counterrevolution.

The most absurd omission in Rothbard’s U.S.-U.S.S.R. comparison, though, is that he pays zero attention to how the two countries acted in victory.   Doesn’t that have anything to do with who deserves to be named the century’s biggest imperialist?

While it’s true that the U.S. can be a truly barbarous combatant, abject surrender to American occupation leads to amazingly good results.  The American occupation of Germany and Japan clearly paved the way for the most libertarian policies these countries had ever known, not to mention peace and prosperity.

On the other hand, Soviet occupation almost invariably led to mass murder, mass deportations, wide-scale slave labor, collectivization, famine, and other horrors.  Abject surrender was no protection, as the citizens of the Baltics learned in 1940-1.  To say that sovietizing Eastern Europe was all part and parcel of rolling back Hitler’s invasion is absurd.  The creation of the Soviet bloc may have been opportunistic, but it was still a clear-cut case of an “expansionist” foreign policy.

To be blunt, the main thing decent people around the world have had to fear from the U.S. is that they’ll get killed in the crossfire if their government or fellow citizens resist.   The main thing decent people around the world had to fear from the U.S.S.R., in contrast, was that they would experience the standard treatment the Soviets dealt to everyone under their control.

The post appeared first on Econlib.

1. I last debated Garett Jones on immigration in 2015. A lot has happened in the interim: global and national politics aside, I published my Open Borders, and Jones published his Hive Mind and The Culture Transplant. This Friday, UATX is hosting a rematch, open to the public. Start time: 12:45 PM, at the UATX campus: Scarbrough Building, 522 N Congress Ave STE 300, Austin, TX 78701. Coleman Hughes will be moderating.

2. Other UATX events: the last game night will be on campus on Thursday at 6 PM. The last karaoke night will be on campus on Friday at 6 PM.

3. Want to get lunch or dinner with me in Austin before I depart on June 5? Email me.

4. On June 8, I’ll be in New York City to debate Heritage’s Simon Hankinson for the Soho Forum on “Immigration and Customs Enforcement (ICE) should complete its mandate to deport all illegal aliens currently residing in the United States.” Doors open at 6 PM. Address: The Sheen Center, 18 Bleecker St, New York, NY 10012. If you’ve previously heard me debate immigration, I promise to open with a totally different argument than I’ve ever publicly made before. An argument so undeniable that in a just world I’d get 100% of the vote.

5. Earlier that day, I’m hosting a meet-up at Da Nico restaurant in Little Italy. My flight lands around 12:30, so the tentative start time is 2 PM. Please RSVP in the comments, and I’ll post an update if I’m arriving late. Address: 164 Mulberry St, New York, NY 10013.

6. The dates for Capla-Con 2026 are still up in the air. It may be in early July, but failing that, mid-August. Feel free to post your preferences in the comments, which matter at the margin.

   

Capitalism stands its trial before judges who have the sentence of death in their pockets. They are going to pass it, whatever the defense they may hear; the only success victorious defense can possibly produce is a change in the indictment.

Then Rothbard gets down to business.  He defends the benefits of economic growth and technology against radical Greens, and takes a proto-Simonian position on natural resource scarcity.  He then explains how private property gives incentives for conservation and discovery.  A corollary is that expanding the scope of private property would solve many environmental problems.  His chief example is aquaculture:

[I]f anyone tried to farm the sea and to increase the productivity of the fisheries by fertilizers, he would immediately be deprived of the fruits of his efforts because he could not keep other fishermen from rushing in and seizing the fish… Furthermore, there is no economic incentive–in fact, there is every disincentive–for anyone to engage in technological research in the ways and means of improving the productivity of the fisheries, or in extracting the mineral resources of the oceans. There will only be such incentive when property rights in parts of the ocean are as fully allowed as property rights in the land.

Finally, Rothbard turns to pollution.  Here he departs from almost every other environmental economist, left and right, by calling for outright bans on air and noise (!) pollution. 

The remedy is simply for the courts to return to their function of defending person and property rights against invasion, and therefore to enjoin anyone from injecting pollutants into the air…

The argument that such an injunctive prohibition against pollution would add to the costs of industrial production is as reprehensible as the pre-Civil War argument that the abolition of slavery would add to the costs of growing cotton, and that therefore abolition, however morally correct, was “impractical.”

Rothbard then attacks Friedmanite proposals for pollution taxes or tradeable permits, and suggests that technological progress could cope with a total pollution ban:

Mufflers can be installed on noisy machines that emit sound waves precisely contra-cyclical to the waves of the machines, and thereby can cancel out these racking sounds. Air wastes can even now be recaptured as they leave the chimney and be recycled to yield products useful to industry. Thus, sulfur dioxide, a major noxious air pollutant, can be captured and recycled to produce economically valuable sulfuric acid. The highly polluting spark ignition engine will either have to be “cured” by new devices or replaced altogether by such nonpolluting engines as diesel, gas turbine, or steam, or by an electric car.

Critical Comments
There’s a lot to like in this chapter.  The opening ridicule is priceless.  His early defense of free-market environmentalism and resource optimism are also very good. 

The problems arise in the section on pollution.  A total ban may sound good, but doesn’t it imply that breathing and speaking are impermissible acts of aggression?  After all, you don’t get other people’s consent to emit carbon dioxide on them, or bombard their ears with sound waves.

Rothbard might reply that spraying me with small amounts of carbon dioxide is too minimal to deserve to be called “aggression.”  But then couldn’t a polluting factory owner argue the same thing?  In the end, both the individual and the factory owner wind up arguing that their emissions are “reasonable,” and there’s no clean way for libertarian principle to adjudicate their claims.  Under the circumstances, what’s so awful about e.g. tradeable pollution rights? 

In Hard Heads, Soft Hearts, Alan Blinder tells us that, “A pollution-free society is unattainable, both physically and economically.  To think otherwise is not to think.”  In For a New Liberty, Rothbard seems to stubbornly deny Blinder’s truism.  It is interesting, then, that Rothbard later wrote “Law, Property Rights, and Air Pollution,” an article that – for practical purposes – completely vitiated his hard-line position. 

How so?  In this article, Rothbard continues to insist on an absolute right to not be polluted upon, but he also insists upon stringent hurdles to prosecution.  A victim is entitled to an injunction against pollution provided that:

(a) the polluter has not previously established a homestead easement; (b) while visible pollutants or noxious odors are per se aggression, in the case of invisible and insensible pollutants the plaintiff must prove actual harm; (c) the burden of proof of such aggression rests upon the plaintiff; (d) the plaintiff must prove strict causality from the actions of the defendant to the victimization of the plaintiff; (e) the plaintiff must prove such causality and aggression beyond a reasonable doubt; and (f) there is no vicarious liability, but only liability for those who actually commit the deed.

Unfortunately, if a million people simultaneously pollute, it will be impossible to prove that any one person caused any one injury, so despite Rothbard’s “ban all pollution” position, people will be able to pollute with impunity. 

The lesson I draw: When right and wrong are black and white – and they often are – Rothbard does better than mainstream thinkers.  Pollution, however, is an intrinsically gray issue – and when such questions arise, Rothbard winds up awkwardly vacillating between two unsatisfactory extreme positions.

The post appeared first on Econlib.

P.S. Games and karaoke continue at UATX this week! Games tonight (Thurs) at 6 PM, karaoke tomorrow (Fri) at 6 PM. Someone will be in the UATX lobby at 6 PM to admit you.

Given all this insanity, you might expect Spain to be an economic wasteland. But it’s obviously not. I’ve been to almost every major region of Spain, and wherever I go, the country is bursting with high-quality commerce. Apologists for the status quo could jubilantly declare, “See, making businesses wait years to open is actually good!”

But that’s absurd, so what’s really afoot? Simple: Businesses have an unsung superpower. They aren’t just awesome at producing and marketing goods and services. They are also awesome at coping with government stupidity — rule by people that my good friend Scott Aaronson aptly describes as “blankfaces”:

What exactly is a blankface? He or she is often a mid-level bureaucrat, but not every bureaucrat is a blankface, and not every blankface is a bureaucrat. A blankface is anyone who enjoys wielding the power entrusted in them to make others miserable by acting like a cog in a broken machine, rather than like a human being with courage, judgment, and responsibility for their actions. A blankface meets every appeal to facts, logic, and plain compassion with the same repetition of rules and regulations and the same blank stare—a blank stare that, more often than not, conceals a contemptuous smile.

Suppose you know that opening a new grocery store requires three years of bureaucratic hell. A mediocre entrepreneur will start filling out the paperwork on the day that consumer demand makes a new store profitable. A good entrepreneur, in contrast, will start filling out the paperwork three years before consumer demand makes a new store profitable, so the doors can open on the first day there’s money to be made.

Thanks to competition, consumers ultimately pay the price of wasteful government policies. This is Econ 1: As long as prices remain free, government stupidity reduces supply and raises prices, allowing businesses to remain profitable despite their hostile economic environment.

Crucially, however, the process of complying with sheer idiocy is itself competitive! Suppose firms can figure out how to streamline the compliance process. There’s learning by doing, or economies of scale in compliance. Then thanks to competition, businesses ultimately pass these compliance savings on to consumers.

Imagine, for example, that Spanish licensing requirements raise business costs by an average of 20%. You might think that prices would have to rise 20% to pay for these burdens. But in reality, some firms will be much better at coping with licensing requirements than others. Their costs “only” rise by, say, 10%. What happens? “Average” firms go out of business, and get replaced by firms with superior coping skills. Firms that contemplate the blankfaces and quietly tell themselves, “Here’s how we’ll handle these morons” rather than “Poor me, this is hopeless.”

If you have a deontological objection to negligent coercion — as you should — you might consider my superpower story to be bad news. After all, if government stupidity had devastating economic effects, governments would be under a lot of pressure to avoid stupidity. But whatever your meta-ethics, the fact remains: In a business environment with lots of stupid government policies, businesses that survive tend to be very good at coping with government stupidity.

Some stupidity, granted, is so egregious that no one can figure out how to cheaply defuse it: See immigration restrictions and housing regulation. Some countries are so short on entrepreneurial talent — and so hostile to multinational business — that government stupidity keeps them mired in poverty. But in most industries and most countries, businesses merrily chug along despite rule by blankfaces. If your business leaders are smart enough, massive government stupidity could be quite livable. And if you travel the EU — or California for that matter — I must confess that this is largely what you see.

I want to defend the idea that economics has some counter-intuitive propositions to offer. It does depend on what “intuitive” means, though. I think it’s fair to say that something is intuitive if someone without formal training in the area can think it through on their own.

That’s too high of a bar. I’d say “X is intuitive” roughly means “If you clearly state X to a person of average intelligence when they are calm, they quickly see that it is plausible.”

If it takes an economist re-framing the issue to show the answer makes sense, it’s not necessarily intuitive. In other words, economics can be made intuitive, but it takes effort and skill.

It depends on how much “re-framing” you need! If it’s just a few sentences, that’s good enough for “intuitive.” Think about reading Bastiat for the first time. If you stay calm and read closely, it makes sense in 3-6 minutes.

Here’s one proposition I think is counter-intuitive for most people: adding housing for rent at above-average prices can lower the average price of housing in a city. There’s an easy way to make this intuitive. Rephrase it as “Adding housing for rich people makes other housing available for poor people.” You could also say “Making landlords face steeper competition incentivizes them to lower rents.” I just don’t think the average person will immediately see that those propositions are as tightly interrelated as they really are.

I agree that it’s not “immediate.” But calm adults will agree in a matter of minutes. The problem is that most are too emotional even to listen.

As I’m sure you know, Elmendorf, Nall, and Oklobdzija found people have economically nonsensical views about housing economics and that their beliefs are mostly “non-attitudes” that aren’t consistent over time. They also found people change their beliefs when given an intuitive explanation like housing as a game of musical chairs. That doesn’t sound to me like people are just being emotional about it!

ENO’s effect sizes are quite modest. My story explains the vast majority of people who aren’t convinced.

Emotional attachment to a certain way of thinking would look like confirmation bias or under-updating in light of countervailing evidence.

Maybe. But the main thing that “emotional attachment” looks like is:

Basic economics makes psychologically normal humans angry and disgusted. Usually mildly, but the uglier the economic lesson, the more extreme the anger and disgust become.

This looks to me like people just don’t think about housing markets very carefully and rely on faulty intuitions.

They don’t think very carefully, but they still have strong opinions against, say, letting developers buy up townhomes in San Francisco to replace them with skyscrapers. Which is very weird. Why would anyone have strong opinions about issues they haven’t thought about very carefully? Because they’re relying on emotion instead!

Admittedly, those authors also found that people change their stated policy preferences more when given normative stories that directly address their moral concerns about developers, which could be taken as an emotional reaction. However, I think it’s also pretty rational to change your normative views when someone directly addresses something about them! It could easily be that people are lazy and intuitive about their descriptive beliefs but emotional and ideological about their normative beliefs. That doesn’t even strike me as necessarily a bad thing.

I’m tempted to reply, “It’s not just a bad thing; it’s the bad thing.” But that would be overly emotional on my part. My considered reaction is just: If lazily adopting strong opinions is “pretty rational,” your bar for “pretty rational” must be very low.

I think we’d agree that one of the biggest benefits of an economics education is simply being disabused of popular narratives that rely on lazy thinking, like imagining market profits predominantly come from taking advantage of others or that businesses with rising costs will choose to “make up the losses” by expanding volume.

Unfortunately, this rarely works. Even after a full semester of intro econ, we’re lucky if students parrot back these lessons on the final exam. Very few permanently embrace the economic way of thinking.

We agree, in other words, on the importance of rational irrationality.

A separate issue! But I affirm that people are much more likely to accept counter-emotional conclusions when the stakes are high.

I think where we diverge is that I believe people aren’t relying on mere emotional attachment to a certain implicit descriptive model of the world. The implications for our normative beliefs sound to me like your model would lead us to tell people to just be less emotional (slim chance!)

It is notoriously difficult to get emotional people to stop being emotional. But so what? A diagnosis can be exactly correct even though no effective cure exists.

whereas I think economists need to inject more sound economic thinking into our popular narratives. Less Rainbow Fish, more Tom Strong, perhaps?

I’m open to almost any form of marketing that works. But sadly, none work well on psychologically normal humans, because they are too emotional.

Alex

P.S. If basic economic thinking were so intuitive, surely it wouldn’t be in our intro courses? It would be unnecessary to teach, so surely we’d just move what was unintuitive in the advanced courses and put it in Principles!

As Ben Stein hilariously showed in Ferris Bueller’s Day Off, the typical economist is a poor teacher. But even the best economics teacher in the world needs a lot of time to convey highly intuitive information if the students feel anger and disgust toward the material.

Rothbard begins by sketching how a free market would handle “police, law, and the courts.”  In a nutshell: Police would sell subscriptions; courts would be hired by police firms to resolve their disputes; the law would emerge from judicial firms’ quest to attract customers with their wise, streamlined legal codes.

Rothbard answers many questions along the way, but he devotes the most time to…

…a final nightmare which most people who have contemplated private protection agencies consider to be decisive in rejecting such a concept. Wouldn’t the agencies always be clashing? Wouldn’t “anarchy” break out, with perpetual conflicts between police forces as one person calls in “his” police while a rival calls in “his”?

Rothbard has one answer for “honest disagreements,” and another for “outlaw protectors.” 

Honest disagreements, he says, would rarely lead to violence, because it is in businesses’ interest to hammer out peaceful ways to resolve disputes:

Every consumer, every buyer of police protection, would wish above all for protection that is efficient and quiet, with no conflicts or disturbances. Every police agency would be fully aware of this vital fact. To assume that police would continually clash and battle with each other is absurd… To put it bluntly, such wars and conflicts would be bad–very bad–for business… [A]ll conflicts of opinion would be ironed out in private courts, decided by private judges or arbitrators.

Doesn’t this just push the problem back a step?  No.  Rothbard offers the reader a complete flow chart:

Mr. Jones is robbed, his hired detective agency decides that one Brown committed the crime, and Brown refuses to concede his guilt. What then?… Jones would go to the Prudential Court Company to charge Brown with theft.

It is possible, of course, that Brown is also a client of the Prudential Court, in which case there is no problem. The Prudential’s decision covers both parties, and becomes binding…

What, however, if Brown does not recognize the Prudential Court? What if he is a client of the Metropolitan Court Company? …The case will then be heard by Metropolitan. If Metropolitan also finds Brown guilty, this too ends the controversy and Prudential will proceed against Brown with dispatch. Suppose, however, that Metropolitan finds Brown innocent of the charge. Then what? Will the two courts and their arms-wielding marshals shoot it out in the streets?

Once again, this would clearly be irrational and self-destructive behavior on the part of the courts… Thus, an essential part of any court’s service to its clients would be an appeals procedure. …The appeals judge would make his decision, and the result of this third trial would be treated as binding on the guilty…

An appeals court! But isn’t this setting up a compulsory monopoly government once again? No, because there is nothing in the system that requires any one person or court to be the court of appeal…

But suppose Brown insists on another appeals judge, and yet another? Couldn’t he escape judgment by appealing ad infinitum? … In the libertarian society, there would also have to be an agreed-upon cutoff point, and since there are only two parties to any crime or dispute–the plaintiff and the defendant–it seems most sensible for the legal code to declare that a decision arrived at by any two courts shall be binding.

OK, what about “outlaw protectors”?  Rothbard’s answer: the free market provides built-in “checks and balances” that make dishonesty and open violence hazardous to the perpetrators’ health:

What would keep the free-market judges and courts honest is the lively possibility of heading down the block or down the road to another judge or court if suspicion should descend on any particular one… These are the real, active checks and balances of the free-market economy and the free society.

The same analysis applies to the possibility of a private police force becoming outlaw, of using their coercive powers to exact tribute, set up a “protection racket” to shake down their victims, etc… [I]n contrast to present-day society, there would be immediate checks and balances available; there would be other police forces who could use their weapons to band together to put down the aggressors against their clientele. If the Metropolitan Police Force should become gangsters and exact tribute, then the rest of society could flock to the Prudential, Equitable, etc., police forces who could band together to put them down.

Rothbard ends the chapter with a brief discussion of national defense.  Even if the Soviet Union were “hell-bent on attacking a libertarian population,” he opines that decentralized deterrence might work better than what we’ve got.  And if that falls through, we’ve always got guerrilla warfare:

[T]he occupying Russians’ lives would be made even more difficult by the inevitable eruption of guerrilla warfare by the American population. It is surely a lesson of the twentieth century–a lesson first driven home by the successful American revolutionaries against the mighty British Empire–that no occupying force can long keep down a native population determined to resist.

Critical Comments
This is the chapter that has literally converted thousands of highly intelligent, economically informed people to anarcho-capitalism.  The first time I read it, I thought it was crazy.  By the tenth time I’d read it, Rothbard had made a believer out of me.

What’s the appeal?   In all honesty, its sheer eloquence is hard to resist.  I still get chills from passages like:

And, indeed, what is the State anyway but organized banditry? What is taxation but theft on a gigantic, unchecked, scale? What is war but mass murder on a scale impossible by private police forces? What is conscription but mass enslavement? Can anyone envision a private police force getting away with a tiny fraction of what States get away with, and do habitually, year after year, century after century?

But there’s a lot more to this chapter than soaring sentences.  While Rothbard doesn’t use this term, his main intellectual achievement here is to show that anarcho-capitalism is a plausible Nash equilibrium.  If a free market in police, courts, and law were established and expected to continue, then Rothbard persuasively argues that no major actor would have a strong incentive to undermine it.  If one police firm stopped peacefully settling disputes, its costs would skyrocket and most of its customers would abandon it.  If a judge became corrupt, he’d ruin his reputation and lose most of his business.  If one firm tried to become the new government, the most likely result is that its employees would quietly fail to show up for work.

Alas, world history shows that there are many other equilibria, and it’s extremely difficult to explain how to move to the good equilibrium that Rothbard sketches.  If the U.S. government dissolved itself overnight, almost everyone would expect violent chaos, and this expectation would be self-fulfilling.

Also of note: Even Rothbard lacks the chutzpah to confidently claim that decentralized “national defense” would better deter a Soviet invasion than the Department of Defense.  He makes up for this chutzpah shortfall, though, with the single most ridiculous argument in the entire book:

But suppose–just suppose–that despite all these handicaps and obstacles, despite the love for their new-found freedom, despite the inherent checks and balances of the free market, suppose anyway that the State manages to reestablish itself. What then? Well, then, all that would have happened is that we would have a State once again. We would be no worse off than we are now, with our current State. And, as one libertarian philosopher has put it, “at least the world will have had a glorious holiday.” Karl Marx’s ringing promise applies far more to a libertarian society than to communism: In trying freedom, in abolishing the State, we have nothing to lose and everything to gain.

I don’t think I’ve ever seen a paragraph with a greater disparity between beauty and truth.  Have you?

The post appeared first on Econlib.

Moving on, here’s the alternate version of yesterday’s essay.

I love low-skilled workers.

Not in the mawkish, “Let us applaud the dignity of labor before we vote to price it out of existence” way. I mean it literally. I love what they do for me, my family, my friends, my students, my country, and the world. Low-skilled workers make modern life livable. They cook the food, wash the dishes, clean the hotel rooms, stock the shelves, mow the lawns, change the diapers, move the boxes, bag the groceries, pave the roads, pour the concrete, bus the tables, drive the cars, and take out the trash.

Civilization is not just symphonies, microchips, and MRI machines. Civilization is also a clean bathroom at an airport.

This should be obvious. Yet low-skilled workers are probably the most underrated people in the modern economy. The upper-middle class is trained to gush over teachers, nurses, scientists, artists, entrepreneurs, and “public servants.” Fine. Many of these people do great things. But the workers we praise least often do the work we most immediately miss when it stops.

Imagine a one-day strike by philosophy professors. Then imagine a one-day strike by garbage collectors. I rest my case.

The standard complaint is that low-skilled workers are “unproductive.” Compared to whom? Compared to a superstar programmer, yes. Compared to a surgeon, yes. Compared to a worker who does not exist? No. The low-skilled worker’s marginal product may be modest, but modest is not zero. And when there are millions of such workers, modest adds up to mountains.

The low-skilled worker is the marginal difference between a restaurant that opens and a restaurant that closes. Between a hotel that is clean and a hotel that is filthy. Between a construction crew that finishes this month and a construction crew that finishes next year. Between a nursing home that functions and a nursing home that terrifies.

Once you see this, a great deal of conventional compassion starts to look like thinly veiled contempt.

“We must protect low-skilled workers from competition,” say the friends of the poor, before supporting minimum wages that make it illegal for the least-skilled to get hired.

“We must protect low-skilled Americans from immigrants,” say the nationalists, before excluding millions of people eager to do useful work for mutually agreeable wages. The National Academies’ massive report on the economic and fiscal consequences of immigration is a good antidote to the view that immigrants are mere mouths rather than workers, consumers, taxpayers, and neighbors.

“We must protect neighborhoods from low-end development,” say the progressives, before blocking the construction workers who would build cheaper housing and the service workers who would live in it. The more one learns about housing supply and rent growth, the harder it is to take “protecting affordability” as an excuse for blocking construction.

“We must protect workers from dead-end jobs,” say the credentialists, before requiring more schooling, licensing, certification, and paperwork for occupations that mostly require reliability and practice. Occupational licensing is often sold as consumer protection; in practice, it frequently functions as a barrier to work.

The result is a world where elites endlessly praise “dignity” while legally constricting the opportunities of the very people they claim to honor.

My view is simpler: If someone wants to work, and someone else wants to hire him, rejoice. Do not demand a theory of cosmic justice before allowing them to cooperate. Do not ask whether the job is “good enough” by your standards. Ask whether it is better than the worker’s next-best option. If it is, your interference is not compassion. It is sabotage.

The nobility of low-skilled work is not that it is romantic. Much of it is tiring, repetitive, boring, and unpleasant. The nobility is that people do it anyway because other human beings value the result. That is enough. More than enough.

The economic case is overwhelming. Low-skilled workers expand output. They lower prices. They let higher-skilled workers specialize. A surgeon with a clean operating room, an economist with childcare, a CEO with a functioning supply chain, a parent with takeout dinner, and a tourist with a made bed are all more productive because someone else handled tasks that needed handling.

This is the division of labor. It is not glamorous. It is glorious.

And the moral case is stronger still. Work is one of the main ways human beings enter society as contributors rather than dependents. A job gives people income, habits, contacts, language practice, local knowledge, and self-respect. For immigrants especially, low-skilled work is often the first rung on a ladder. Not a guarantee of riches. A rung. A start. A way in.

The great social tragedy is not that some people begin in low-skilled jobs. The tragedy is that law and prejudice keep so many people from beginning at all. The global losses from keeping workers trapped in poor countries are not small; Michael Clemens famously called migration barriers “trillion-dollar bills on the sidewalk”.

When I praise low-skilled workers, I am not saying they should remain low-skilled forever. Quite the opposite. The best way to become more skilled is often to work. Show up. Learn the language. Learn the city. Learn the customers. Learn the machines. Learn what bosses value. Learn what co-workers resent. Learn what punctuality, cheerfulness, and competence are worth in practice. School can help, but the workplace is a school, too — and unlike most schools, it pays students to attend.

Nor am I saying every employer is a saint. Some are jerks. Some are fools. Some are petty tyrants. But the remedy for bad bosses is usually more options, not fewer. A thick labor market is the worker’s best friend. More employers. More customers. More firms. More immigrants. More housing. More mobility. More exit.

The sentimentalist says, “No one should have to do that job.”

The economist replies, “Then who will do it?”

The humane economist adds, “And what happens to the person who wants that job because all his other options are worse?”

There is no shame in low-skilled work. There is shame in idleness enforced by law. There is shame in treating adults like children. There is shame in preferring that a poor immigrant remain poor abroad rather than wash dishes here. There is shame in praising “the working class” while making it illegal to build the apartments, open the businesses, and hire the workers who would let the working class flourish.

So here is my ode:

To the janitor who makes the office usable before the office workers arrive.

To the dishwasher who saves the evening after the diners depart.

To the roofer under the August sun.

To the cashier who absorbs a hundred tiny indignities and still says, “Have a nice day.”

To the hotel maid who restores order after strangers leave chaos.

To the delivery driver who turns my laziness into dinner.

To the immigrant with poor English, little money, and a heroic willingness to start at the bottom.

Thank you. You are not a problem to be solved. You are fellow builders of civilization.

The least we can do is stop getting in your way.

The first is written by me the old-fashioned way.

The second is written by ChatGPT, using the prompt “Write a Bryan Caplan Bet On It post called ‘An Ode to Low-Skilled Workers.’”

I doubt you’ll have trouble figuring out which version is which, and I hope you’ll prefer my essay to the AI’s. But either way, please share your thoughts in the comments today and tomorrow.

Modern immigration debates are largely a contest between a populist side insisting, “Immigrants are terrible” and an elitist side countering with, “High-skilled immigrants are good.” Which, by implication, concedes that low-skilled immigrants are terrible.

Why, though, would low-skilled immigrants be terrible? You can imagine that low-skilled immigrants are prone to carry horrible Third World diseases, or are highly prone to terrorism. But this is just worst-case thinking. Mainstream standard complaints about low-skilled immigrants flow directly from a broader syllogism:

Major Premise: Low-skilled workers are terrible.

Minor Premise: Low-skilled immigrants are low-skilled workers.

Conclusion: Therefore, low-skilled immigrants are terrible.

Social Desirability Bias obviously stops even the angriest nativists from stating the Major Premise. But it’s the Major Premise that does the work. Why do low-skilled immigrants contribute relatively little to the economy? Because low-skilled workers contribute relatively little to the economy. Why would low-skilled immigrants be a burden on the welfare state? Because low-skilled workers are a burden on the welfare state. In fact, if you know the fiscal math, low-skilled natives are generally a bigger fiscal burden than low-skilled immigrants, because the former are far more likely to receive exorbitantly-priced public education.

To be clear, almost no one explicitly embraces the Major Premise. It’s an ugly idea, and voicing it makes the speaker look ugly by extension. But all Social Desirability Bias aside, “Low-skilled workers are terrible” is absolute lunacy. Most obviously, we’d starve without low-skilled workers, because they grow almost all of our food. The vast majority of construction and infrastructure workers lack college degrees, and without them, we’d be living in tents. If we’re lucky, because tents are made by low-skilled workers, too.

The basic necessities of food and housing aside, modern economies primarily provide services. Some of these services — like healthcare — are canonically high-skilled. But a vast range of tasks — food preparation, childcare, elder care, delivery, cleaning, maintenance — are largely performed by low-skilled workers.

What about Garett Jones’ finding that the social return to IQ vastly exceeds its private return? Low-skilled workers definitely have lower IQs than high-skilled workers, so if the gap between social and private returns to IQ were large enough, his math would imply that low-skilled workers are indeed terrible on balance. But as Jones himself conceded, the gap simply isn’t large enough: While importing vastly more low-IQ immigrants definitely reduces per-capita GDP, total production for humanity goes up, not down. Closely examined, Jones’ results confirm the common-sense result that low-IQ workers are vital for prosperity. Which is good news for him, because the essential social contribution of low-skilled agricultural workers is clear, while almost any regression is open to doubt.

The economically soundest reply to all these observations: “The average low-skilled worker is good. It’s the marginal low-skilled worker that’s terrible.” Logically speaking, this is a fine response, but anyone who utters it accepts a heavy evidentiary burden. If the typical low-skilled worker is so useful, why would an extra low-skilled worker be so useless? Yes, many of us feel satiated for food, and perhaps (if you’re in a cheap part of the country) for housing as well. Yet who feels satiated for time? Almost no one. In the First World, even wealthy people rarely employ a single personal servant. Yet if the price were right, most people would probably enjoy having at least four such servants: a valet, a driver, a cook, and a maid. After all, if you go to countries with very cheap labor, upper-class families commonly retain this eminently useful quadfecta.

Yes, if the economy had to lose either Jeff Bezos or his driver, we’d be better off with Bezos. But the economy is, fortunately, not a Trolley Problem. We almost never choose between Bezos and his driver, or between any high-skilled worker and any low-skilled worker. To quote the catchphrase of my late obese aunt, we’re free to announce, “I’ll have both.” And since the purpose of services is to save customers’ time, saying “Let’s have Bezos and his driver” is functionally equivalent to saying, “Let’s have Bezos with some extra Bezos.”

If you want to see how useful low-skilled workers really are, go to a Japanese 7-11. There, you will encounter cashiers of utmost competence. As a tourist, it’s a pleasure. But from an economic point of view, it is a tragic waste of human potential. If Japan welcomed a hundred million low-skilled immigrants, native-born cashiers would become store managers almost overnight. They’re more than qualified for the job! But in actually-existing Japan, high-skilled workers are stuck doing low-skilled work.

I freely confess: Very few of my personal friends are low-skilled workers. I’m a professor and a nerd, with decidedly high-brow tastes. If I tried sharing my feelings with any particular low-skilled worker, my outreach would no doubt come off as awkward and condescending. But I still declare before the whole world that I am deeply, sincerely grateful for low-skilled workers’ ubiquitous life-sustaining and life-affirming contributions. Contrary to popular insinuations, you are not charity cases. You keep us alive. You put roofs over our heads. You care for our children and our elders. You pick up the slack of life, taking care of the troubles others are too frazzled to handle. You deserve respect and appreciation, not casual disdain. Elites who talk as if you’re a massive burden aren’t merely rude. They are massively, blatantly, grotesquely wrong.

Abolition of the public sector means, of course, that all pieces of land, all land areas, including streets and roads, would be owned privately, by individuals, corporations, cooperatives, or any other voluntary group ings of individuals and capital.

He begins by explaining that in a libertarian society, street-owners would take over many of the functions that governments now perform: security, cleaning, lighting, enforcing traffic rules, etc.  While it would be within owners’ rights to impose any sort of crazy rule, market forces strongly encourage a high degree of uniformity:

Wouldn’t some owners designate red for “stop,” others green or blue, etc.? Wouldn’t some roads be used on the right- hand side and others on the left? Such questions are absurd. Obviously, it would be to the interest of all road owners to have uniform rules in these matters, so that road traffic could mesh smoothly and without difficulty. Any maverick road owner who insisted on a left- hand drive or green for “stop” instead of “go” would soon find himself with numerous accidents, and the disappearance of customers and users.

He then accuses government of inefficiently subsidizing the quantity of highways while inefficiently underpricing their use.  The problem is especially acute, he notes, during peak times:

The fact that gasoline taxes are paid per mile regardless of the road means that the more highly demanded urban streets and highways are facing a situation where the price charged is far below the free-market price. The result is enormous and aggravated traffic congestion on the heavily traveled streets and roads, especially in rush hours, and a virtually unused network of roads in rural areas.

Wouldn’t a giant network of toll roads be a major inconvenience?  Not so – Rothbard points to many now-familiar technological advances that take the pain out of toll collection.

The chapter ends with a brief discussion of the history of private roads in Britain and the U.S.

Critical Comments
This has always struck me as the least convincing chapter in the book.  Yes, Rothbard makes many points that most economists would accept: It’s inefficient for government to heavily subsidize roads, then let people use them whenever they like at zero marginal cost. But he doesn’t offer any remotely practical plan to privatize existing roads, much less explain how privatization would avoid severe monopoly problems.  (I propose one Rube Goldberg solution here, though even I have serious doubts about it).

Admittedly, if government had never gotten into the road business, the road network would have grown organically with the rest of the economy, and market forces would have kept monopoly problems in check.  Before people built homes, they would have made sure they weren’t at the mercy of a single road supplier.  At this point, unfortunately, the owner of a privatized road would often be in a position to extract virtually the entire value of the surrounding real estate (minus a mountain of deadweight costs).

Of course, if new entry were feasible at a reasonable expense, any monopoly problems would only be temporary.  Indeed, the fear of potential competition might lead road owners to charge competitive prices from the get-go.  But Rothbard doesn’t even mention the standard reason for skepticism about new road construction: The hold-out problem.  Stripped of the power of eminent domain, how could a private corporation build a major new highway in a developed area? 

I am aware, of course, that some libertarians argue that the hold-out problem has been greatly oversold.  Maybe they’re right, but it’s still odd for Rothbard to completely ignore the objection. 

The post appeared first on Econlib.

I want to defend the idea that economics has some counter-intuitive propositions to offer. It does depend on what “intuitive” means, though. I think it’s fair to say that something is intuitive if someone without formal training in the area can think it through on their own. If it takes an economist re-framing the issue to show the answer makes sense, it’s not necessarily intuitive. In other words, economics can be made intuitive, but it takes effort and skill.

Here’s one proposition I think is counter-intuitive for most people: adding housing for rent at above-average prices can lower the average price of housing in a city. There’s an easy way to make this intuitive. Rephrase it as “Adding housing for rich people makes other housing available for poor people.” You could also say “Making landlords face steeper competition incentivizes them to lower rents.” I just don’t think the average person will immediately see that those propositions are as tightly interrelated as they really are.

As I’m sure you know, Elmendorf, Nall, and Oklobdzija found people have economically nonsensical views about housing economics and that their beliefs are mostly “non-attitudes” that aren’t consistent over time. They also found people change their beliefs when given an intuitive explanation like housing as a game of musical chairs. That doesn’t sound to me like people are just being emotional about it! Emotional attachment to a certain way of thinking would look like confirmation bias or under-updating in light of countervailing evidence. This looks to me like people just don’t think about housing markets very carefully and rely on faulty intuitions. Admittedly, those authors also found that people change their stated policy preferences more when given normative stories that directly address their moral concerns about developers, which could be taken as an emotional reaction. However, I think it’s also pretty rational to change your normative views when someone directly addresses something about them! It could easily be that people are lazy and intuitive about their descriptive beliefs but emotional and ideological about their normative beliefs. That doesn’t even strike me as necessarily a bad thing.

I think we’d agree that one of the biggest benefits of an economics education is simply being disabused of popular narratives that rely on lazy thinking, like imagining market profits predominantly come from taking advantage of others or that businesses with rising costs will choose to “make up the losses” by expanding volume. We agree, in other words, on the importance of rational irrationality. I think where we diverge is that I believe people aren’t relying on mere emotional attachment to a certain implicit descriptive model of the world. The implications for our normative beliefs sound to me like your model would lead us to tell people to just be less emotional (slim chance!) whereas I think economists need to inject more sound economic thinking into our popular narratives. Less Rainbow Fish, more Tom Strong, perhaps?

Alex

P.S. If basic economic thinking were so intuitive, surely it wouldn’t be in our intro courses? It would be unnecessary to teach, so surely we’d just move what was unintuitive in the advanced courses and put it in Principles!

In November of 2021, I wrote a piece called “The Upside of Covid,” talking about all of the lemonade I squeezed out of the lemon of the pandemic. But the piece never directly mentions the fact that, thanks to Covid, I became friends with Dwarkesh Patel. Now that his podcast has millions of subscribers, the New York Times has done a deep-dive profile. In the broad scheme of things, this is probably the very best thing to come out of my passage through Covid hell.

Where I enter the story:

Mr. Patel recorded the first episode of “The Lunar Society,” his original name for the podcast, from his dorm room at the University of Texas at Austin in 2020, during the early months of the Covid pandemic, when he was 19. He was taking online classes, bored, and thirsty for intellectual engagement. So he did what any normal college sophomore might do and cold-emailed Bryan Caplan, a member of George Mason University’s famously libertarian economics department. In the email, he described how three Caplan books had shifted his perspective on immigration, education and how many children to have. Mr. Caplan responded encouragingly, and after a further friendly exchange, Mr. Patel asked if he could interview him for a podcast. Mr. Caplan was impressed with the result. “He wasn’t just repeating 10 questions from everyone else. He had his own close-reading questions.”

Mr. Caplan and his sons happened to spend a couple of months that summer in Austin, staying at the home of Steve Kuhn, the billionaire ex-hedge fund manager. Mr. Patel had lunch with Mr. Caplan nearly every day, and joined him at Mr. Kuhn’s house for pickleball (Mr. Kuhn founded Major League Pickleball), intellectual salons and role-playing games, including the Mr. Caplan-written “Badger and Skinny Pete,” based on two “Breaking Bad” characters.

Aside: You can play this game with me in Austin!

The profile goes on to explain Dwarkesh’s connection to Steve Kuhn (which I already knew about) and Anil Varanasi (which I remembered nothing about):

…Mr. Patel’s precocity was a magnet for mentors and benefactors. Mr. Kuhn offered to invest in the podcast in return for equity. “Even at that age,” Mr. Kuhn says, “he in some ways commanded the room in ways not many people do.”

Early on, when all Mr. Patel had to show for himself was a couple of blog posts and one podcast episode featuring Mr. Caplan, Anil Varanasi, co-founder of Meter, a network-infrastructure company in San Francisco, reached out and asked how much Mr. Patel would need to keep doing what he was doing for six months. (Mr. Varanasi, a former student of Mr. Caplan’s, has made similar overtures to other promising young people.) Not much, said Mr. Patel, who was then living with his parents in Austin. Mr. Varanasi sent him $10,000. Mr. Caplan opened the door to other interviews, including Tyler Cowen and other George Mason economists. Mr. Cowen, through his Emergent Ventures program, himself later gave Mr. Patel a grant.

Dwarkesh was actually the web designer for the beta version of Bet On It, though I’m still confused that he didn’t recommend Substack right off the bat.

One of my all-time favorite tweets goes, “Anytime you see me in public, please introduce yourself. Making friends has worked out swimmingly for me so far!”

When I posted it, I knew that some benighted souls would predict disaster — a few with anticipatory schadenfreude. But as expected, my happy streak continues. What a privilege it is to know that I helped the great Dwarkesh get his start! He probably would have done just as well without me, but conceivably I really was the marginal factor. Regardless, I’ve made a wonderful friend. Congratulations for all you have and will accomplish and become, Dwarkesh.

Here is the plan:

- 5 minutes -

WELCOME / INTRODUCTION

“Professor Caplan, thank you very much for joining us. Could you begin by introducing yourself and telling us how you became interested in public choice and libertarian political economy?”

- 6 minutes Each -

1) TRADE, PRICE CONTROLS, AND THE POLITICAL APPEAL OF BAD ECONOMICS

“You have consistently defended free trade and opposed policies such as tariffs, minimum wages, rent control, and other price controls even when they are extremely popular with students and voters. Why do these interventions remain so intuitively appealing despite the economic arguments against them, and what trade-offs do you think are most systematically overlooked when people evaluate them?”

⸻

2) PRIVATIZATION, INFRASTRUCTURE, MONOPOLY, AND THE ROLE OF GOVERNMENT

“Libertarian arguments for markets are often easiest to see in competitive industries but much more controversial in areas such as roads, transit, utilities, and other large-scale infrastructure, where economies of scale and network effects are significant. How far do you think privatization should go in these sectors, how would such systems realistically be financed and governed in practice, and what institutional framework—if any—remains for the state beyond enforcing property rights and contracts? In that context, how do you evaluate concerns about monopoly and predatory pricing in a free market, and under what conditions, if any, is government intervention actually justified?”

⸻

3) WELFARE, REDISTRIBUTION, SCANDINAVIA, AND THE MORAL STATUS OF INEQUALITY

“In discussions of poverty and social policy, many students point to the Scandinavian countries as evidence that large welfare states, free or heavily subsidized healthcare, and free college can work well. From a libertarian perspective, how should we interpret those cases, and do you think the goal of policy should be to reduce wealth inequality itself or primarily to expand opportunity? In that context, should existing welfare programs be eliminated, replaced with something like a Negative Income Tax, converted into vouchers, or maintained in some limited form, and how do you weigh the economic and moral trade-offs involved?”

⸻

4) EDUCATION, SIGNALING, SCHOOL CHOICE, AND THE FUTURE OF K–12

“Your work argues that much of formal education functions more as signaling than as human-capital formation. What does that imply for current education policy and for government involvement in higher education? More broadly, do you think a fully market-based K–12 system—potentially replacing traditional public schools with universal school choice or government-funded vouchers directed to families—would produce better outcomes, and how should students think about their own education in light of the signaling model?”

- 3 minutes -

ADVICE TO STUDENTS

“For students who are seriously interested in economics and public policy but are encountering these arguments for the first time, what is the most important habit of thinking they should develop early?”

- 3 minutes -

Open To Q&A

I’m pleased to report that we covered the whole agenda. Again, see for yourself!