The Warmth of Cooperation

By Chris Freiman.

"New York City Mayor Zohran Mamdani recently caused something of an uproar when he contrasted the “the frigidity of rugged individualism” with the “warmth of collectivism.” This framing echoes the familiar criticism that capitalism forces people to go it alone as “atomistic individuals.” The thought goes like this: markets do real damage to the social fabric and our relationships because they organize our economic lives around competition and self-interest. Organizing our lives around competition encourages people to see each other as rivals rather than partners. In brief, capitalism pits us against each other, while socialism brings us together. Setting aside the fact that collectivist regimes haven’t exactly been warm to those living under them, this view gets capitalism backward.

Start with a simple observation about your own economic life under capitalism. Think about this week: how many cooperative interactions have you had, and how many competitive ones?

You probably didn’t compete with anyone when you bought coffee at Starbucks this morning. You didn’t enter a zero-sum struggle when you paid your phone bill, purchased groceries and gas, or caught a movie. Instead, you took part in a series of mutually beneficial, voluntary transactions. You gave someone money and they gave you something you wanted more than the money. Everyone walked away better off. In the words of Adam Smith, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.”

Competition, by contrast, rarely pops up in your day-to-day economic life. A business competes with other businesses for customers and you’ve probably competed with others for a job at some point. But you cooperate far more often than you compete. And notice what market competitions really are—they’re competitions to see who’s best at serving others. You might say that they’re competitions to discover the best ways to cooperate and who the best cooperators are (more on this below).

Unsurprisingly, Smith understood the cooperative nature of markets well. He writes that a wool coat

is the produce of the joint labour of a great multitude of workmen. The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production. How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! How much commerce and navigation in particular, how many ship-builders, sailors, sail-makers, rope-makers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world!

Smith goes on, but I’ve got a word limit here—the point is that markets don’t atomize us. On the contrary, they lead strangers all over the world to cooperate.

Think back to the last time you bought a coffee. Starbucks has to coordinate with bean farmers, shipping companies, truck drivers, warehouse workers, roasters, equipment manufacturers, electricians, plumbers, accountants, and baristas. None of these people know you, and yet they manage, every day, to cooperate in ways that reliably get caffeine in your hand at 7:43 a.m. And this isn’t accidental—the prices provided by markets give people the information they need to figure out what others want, and they provide the incentive to give it to them.

There’s no denying that markets involve competition. You can go to the business section of a bookstore and find titles like Business Warfare and The Warfare of Business. But businesses are competing with each other to see who can best serve consumers. Netflix beat Blockbuster by figuring out a better way to give viewers what they wanted: convenience, selection, no late fees, and eventually streaming. In brief, Netflix won because consumers preferred cooperating with Netflix over Blockbuster.

A similar point applies to competition in the job market. Maybe you don’t merely want to buy coffee from Starbucks, you want to work there, too. But this means you’ll have to compete with other applicants who also want the job. Here again, let’s look at what it takes for an applicant to win this competition. They need to demonstrate that they’ll do the best job of making customers better off—say, by being more punctual, more efficient at making mochas, or more likely to serve drinks with a smile. Market competition is competition to see who can cooperate most effectively with others.

In any case, democratic socialists can’t be opposed to all competition. After all, democracy requires competition, and democratic socialists want democracy in the workplace as well as in politics. If competing for dollars is frigid, it’s hard to see why competing for votes would be any warmer. Market competition enables millions of people with different values, plans, and priorities to work together without agreeing on much of anything by helping them to coordinate many different choices. You and your barista don’t need to agree on the principles of justice to cooperate and make each other better off. Far from being atomizing or frigid, the free market is a system of interdependence that brings strangers together to cooperate for their mutual benefit."

Youth unemployment in Canada near record highs since 2022; unprecedented levels outside of a recession

By Philip Cross of The Fraser Institute. 

The Extraordinary Increase of Youth Unemployment in Canada

• The surge in unemployment for Canada’s young people (ages 15–24) since 2022 has been extraordinary. The upturn reverses a decades-long gradual downward trend.
• Both the speed of the increase and the level of youth unemployment reached are unprecedented for an economy not in recession.
• Youths who were unemployed remained jobless for the longest period ever on record (data starts in 1976).
• The gap between the unemployment rates for youths (13.8 percent) and adults (5.7 percent) in 2025 reached a near all-time high (8.1 percentage points).
• The spread (3.8 percentage points) between the Canadian youth unemployment rate (13.8 percent) and the US rate (10.0 percent) in 2025 approached its all-time high.
• Canada’s youth unemployment rate has been higher than the US rate since 2015, indicating a sustained period of higher unemployment for Canada’s youth compared to our southern neighbour.
• Finally, the unemployment rate for 15–19-year-olds (19.5 percent) was at a near-record high, outside of the COVID-19 pandemic (2020), and the gap (8.6 percentage points) with 20–24-year-olds (10.9 percent) was also at a near all-time high.
• Several government policies contributed to the historic increase in Canada’s youth unemployment.
• Specifically, the increase in immigrant labour (increased supply) and simultaneous increases in minimum wages in most provinces (decreasing demand) are key explanations for the marked rise in youth unemployment.
• It is noteworthy that the weakness in youth employment has been concentrated in the retail trade and accommodation and food services sectors, where 70 percent of youth jobs are situated.

 

Chicago’s “Disappearing Middle Class” Can Be Found in Its Proliferating Upper Middle-Class Neighborhoods

By Scott Winship of AEI. Excerpts:

"In a recent  with Stephen Rose, I argued that the narrative of a “shrinking middle class” was based on a kernel of truth, but one that undermines economic pessimism. We showed that while 36 percent of families were part of what we called the “core middle class” in 1979, the share had fallen to 31 percent by 2024. However, the share of families who fell short of the middle class shrank even more. The middle class has not been hollowed out; rather, the overall decline stems from the net movement of families upward into the upper-middle class. That group, with incomes between 5 and 15 times the 2024 federal poverty guidelines, rose from 10 percent of families in 1979 to 31 percent in 2024.  

Analyses that find a hollowed-out middle invariably rely on definitions of the middle class that peg thresholds to how the typical family is doing. In that case, even if everyone is better off over time in inflation-adjusted terms, if the middle’s gains are stronger than those of families lower down, more people can fall short of “the middle.” The Pew Research Center, for example,  that the share of families that were “lower-income” rose between 1971 and 2023, even though the purchasing power of those lower-income families rose by 55 percent. The explanation for this seeming paradox is that “middle-income” families saw a 60 percent gain, making it harder to reach the middle-income threshold if income rose more slowly than that.  

The point of my paper with Rose was that claims of a “hollowing out” of the middle class wrongly reinterpret widespread gains across the income distribution as rising insecurity and declining living standards. Unbeknownst to us, a perfect example of this misinterpretation appeared a week before we published our report in Chicago magazine. The offending article title  that “Chicago’s Middle Class Is Disappearing.” My reanalysis of the data behind the piece indicates it would be difficult to articulate a more misleading conclusion. Fewer Chicagoans live in middle-class neighborhoods than in 1970—but only because more live in richer neighborhoods."

"the Voorhees Center methodology has the same shortcoming as Pew’s analyses of the shrinking middle class. Both define middle-class status relative to a benchmark that changes over time and is tied to typical contemporary income. If everyone’s income doubles, the middle class is no larger, yet everyone’s income has doubled."

"instead of “middle income” requiring 80 to 120 percent of the 2017 metro average income, it requires 80 to 120 percent of the 1970 metro average income (adjusted for inflation to keep income in terms of constant purchasing power). Using this approach, the share of people living in middle income tracts fell in half from 1970 to 2017—from 51 percent to 25 percent. The share living in tracts below the middle income was roughly constant—42 percent in 1970 and 43 percent in 2017. In contrast, the share living in tracts above middle income more than quadrupled, rising from 7 percent to 31 percent."   

"If we instead use 2015-2019 as the end point (average national unemployment rate of 4.4 percent), the middle income share falls from 51 percent to 26 percent, the lower-income share falls from 42 percent to 36 percent, and the higher income share jumps from 7 percent to 38 percent."

"From 1970 to 2024, the share of Chicagoans who lived in middle income tracts fell from 51 percent to 25 percent. The share living in tracts falling short of middle income dropped from 42 percent to 28 percent. Meanwhile, the share living in upper income tracts rose sevenfold—from 7 percent to a whopping 48 percent. Looking at the top group, very high income tracts were home to just 4 percent of Chicagoans in 1970 but 38 percent in 2024."

"In reality, per capita income in the median Chicagoan’s census tract rose from $29,600 in 1970 to $39,300 in 2024 (both in 2025 dollars)—an increase of one-third. Using relative thresholds and letting class thresholds increase over time, the average Chicagoan in a lower income census tract lived in a tract with a per capita income of $22,300 in 1970 but $27,800 in 2024 (25 percent higher). For Chicagoans in middle income tracts, the increase was from $32,400 to $49,900 (54 percent)."

The AI Boom Is Being Fueled by Imports—and Free Trade

By Scott Lincicome, Alfredo Carrillo Obregon, and Chad Smitson of Cato.

"Data published today by the US Bureau of Economic Analysis show that domestic investment in artificial intelligence is currently acting as a massive tailwind for US economic growth (gross domestic product). The data also show that this American investment boom is being fueled by imports of the servers and other things that datacenters and related AI technologies need:

 

Separate data show, moreover, that imports of these AI-related inputs are entering the country almost entirely free of tariffs, thanks in large part to a mid-2025 decision by President Trump to exempt these items from his global tariff regime:

 

Surely, the AI boom isn’t solely due to free trade, and we wouldn’t expect it to cause every other US industry to boom like AI is today. But one still must wonder how many other American industries might similarly benefit from the same “special” treatment that the AI industry enjoys today—i.e., the treatment almost every industry received before the Trump tariff wall was erected last year." 

HUD Says Realtors Can Now Speak the Truth (about crime rates and school quality)

By Alex Tabarrok. 

"HUD: The U.S. Department of Housing and Urban Development (HUD) sent a “Dear Colleague” letter to real estate professionals clarifying they are not violating the Fair Housing Act when they share information with prospective homebuyers about neighborhood crime rates and school quality data.

“Buying a home is one on the most significant decisions a family will ever make,” said Secretary Scott Turner. “Americans should not be left in the dark about vital facts like neighborhood safety or school quality. HUD is making clear that real estate professionals can openly and lawfully provide this information in an equal and consistent manner to American families.”

The background is that The Fair Housing Act of 1968 prohibits discrimination in housing based on race, color, religion, sex, national origin (and via later amendments) familial status, and disability. Discrimination included “steering” buyers toward or away from neighborhoods based on protected characteristics. The Biden administration ramped this up with a directive and Executive Order that essentially said the Fair Housing Act must be interpreted not just to prohibit discrimination but to redress and undo past discrimination:

This is not only a mandate to refrain from discrimination but a mandate to take actions that undo historic patterns of segregation and other types of discrimination and that afford access to long-denied opportunities.

…the [HUD] Secretary shall take any necessary steps,…to implement the Fair Housing Act’s requirements that HUD administer its programs in a manner that affirmatively furthers fair housing and HUD’s overall duty to administer the Act (42 U.S.C. 3608(a)) including by preventing practices with an unjustified discriminatory effect.

The “discriminatory effect” language reinforced that so-called disparate impact, not just intentional discrimination counted as discriminatory—and it contributed to a legal and reputational environment in which platforms and agents had strong incentives to avoid anything that could be characterized as steering. As a result, by the end of the year, Realtor.com had removed its crime map from all search results, as did Trulia, Redfin announced it would not add crime data to its platform and since Zillow already didn’t include such data, by early 2022 all the major portals had dropped crime information. Similarly, the National Association of Realtors published material instructing agents not to directly answer client questions about neighborhood safety. One article in “The Safety Series” was titled “‘Is This a Safe Neighborhood?’ Don’t Answer That” and by “Safety Series” they meant safety for the realtor not the client.

So without explicitly making such information illegal, the government created a legal and reputational climate that chilled its provision. Portals removed crime maps and realtors became reluctant to answer ordinary buyer questions about neighborhood safety and school quality. That is a degradation of service, not a civil-rights victory. The pretext was that crime information might not be accurate but the real fear was that it would accurately suggest neighborhoods with high percentages of black residents had more crime. Withholding information about crime and schools, however, does not change the facts; it just shifts the informational advantage toward buyers who are wealthy, well-connected, or sophisticated enough to find the data themselves. Moreover, it should go without saying that black homebuyers also want information about neighborhood crime rates–don’t these buyers count? Suppressing truthful information is rarely a good way to improve outcomes. As with Ban the Box, blocking direct access to relevant information encourages worse proxy-based decision-making.

Trump’s HUD is correct: fair housing law should prohibit discrimination, not prevent realtors from telling the truth."

What the Meta–Google Verdict Gets Wrong

Is a product defective if it gives you too much of what you want? And are social-scroll algorithms regulated products — or protected speech?

By Logan Tantibanchachai of AIER. 

"A few weeks ago, social media skeptics received their best news in years.

In KGM v. Meta, a jury found Meta and Google negligent for their role in fueling a youth mental health crisis. Now, six million dollars in damages is basically meaningless to companies that gross hundreds of billions in revenue annually. But the reason this case has gotten so much media attention is for what it might represent. Some have compared the case to the beginning of litigation against Big Tobacco last century, which culminated in a $206 billion master settlement with more than 40 states.

In this case, however, the jury got it wrong. It concluded three things:

• Instagram and YouTube were designed in ways that encouraged uncontrollable use and addictive behaviors.
• The companies failed to adequately warn users, especially minors, about the risks.
• The design of their platforms was a considerable factor in causing the plaintiff’s mental health problems.

All three of these things could be true, but neither Meta nor Google should be held liable for any of them. Unlike prior cases involving social media, KGM treated YouTube and Instagram as fundamentally defective products. The central question wasn’t whether malicious users could misuse these platforms, but whether the platforms themselves posed inherent risks. In general, online companies aren’t legally accountable for what users post due to Section 230 protections — Meta, for instance, wouldn’t be held liable for someone using its products to incite violence. In this case, though, Judge Carolyn Kuhl ruled that platform design elements — like algorithm-driven feeds, autoplaying videos, and push notifications — could be challenged. 

In other words, Instagram and YouTube should be held liable because they’re addictive, and too effective at providing content users want.

In a motion denying summary judgment, Judge Kuhl wrote: “The fact that a design feature like ‘infinite scroll’ impelled a user to continue to consume content that proved harmful does not mean that there can be no liability for harm arising from the design feature itself.” In other words, Meta and Google can be held responsible for designing a product that fulfills a consumer desire. Such an argument is dubious. Product innovation exists precisely to meet the demands of consumers — and that’s a good thing.

If such a conclusion holds, where could it not apply? Oreos are delicious — should Mondelez International be forced to make their product less appealing because a “design feature” of Oreos causes repeated consumption of Oreos, with negative health outcomes? Should TV shows that end on a cliffhanger be banned because such a “design feature” creates an addictive cycle, causing the viewer to continue watching? In excess, many other products besides social media can become addictive, but it’s not the government’s job to single out certain products or consumer desires as addictive. 

And then there’s the First Amendment problem. Even assuming that social media is addictive in a way analogous to tobacco, the two differ in a key respect. Social media companies are being held liable for their speech, which is protected by the First Amendment. As Erwin Chemerinsky, Dean of the UC Berkeley School of Law, put it:

The plaintiffs in these lawsuits argued that companies design algorithms that are tailored to individual users to keep them hooked. But algorithms are themselves speech, and there is no reason to treat this speech differently from the code that encourages people to keep playing video games. 

Or, as the Supreme Court Justice Elena Kagan wrote in Moody v. NetChoice, “the First Amendment … does not go on leave when social media [is] involved.” And while social media is almost certainly a drain on society — decreasing attention spans, increasing depression, and spreading misinformation — neither restricting First Amendment-protected speech nor regulating the free market is the answer.

Forcing social media companies to restrict access to social media won’t necessarily lead to meaningfully lower social media usage by teenagers. For one, even the most extreme option — simply banning social media usage by teenagers — is easily circumvented by most teenagers. Teenagers have cleared visual age checks. As one Australian teenager put it, “I scrunched my face up to get more wrinkles, so I looked older, and it worked!” Perhaps not a high-tech workaround, but it nevertheless worked, and many other techniques do, too.

And even if the current mainstream social media companies — Meta, Google, TikTok, etc. — were forced to make their products less addictive, that would just open the door for competitors to replace them. And then what? Regulate those products until they’re less addictive, too? At some point, the government will just be playing First Amendment Whac-A-Mole. 

Ultimately, this is not a problem for the courts — nor even legislatures — but rather for civil society. Regulating trillion-dollar companies out of existence won’t fix the underlying problem. If social media were intrinsically detrimental, in the way that cigarettes cause a chemical addiction and subsequent health problems, then almost every teenager who uses social media would struggle with addiction and see some demonstrable negative impact on their life. But that’s not the case. About one in five teens say social media has hurt their mental health. Another study found that social media usage beyond three hours a day increased internalizing problems (like anxiety/depression) by about 60 to 80 percent. Neither of these numbers are great. But they also reveal that a significant percentage of teenagers who use social media are perfectly fine. 

So what explains how one teen could use social media and neither become addicted nor have their mental health suffer, and another teen could experience the opposite? Very likely having access to a robust civil society — family, activities, community organizations, religious groups, and other social supports. Social media accounts for about one percent of the variation in life satisfaction. By contrast, family situations explain about a third of life satisfaction for young adults. Running to government for legislation to fix our minor woes allows these important community bonds to atrophy. An important aspect of the liberal political order is the recognition that voluntary, robust civil society can play a much more effective role in addressing these societal problems than can even well-intentioned meddling by the government. Social media is no exception."

Earth Day’s Bad Bet Against Humanity

The Malthusian mind does not see the human capacity to cooperate, trade, discover, invent, and adapt

By Marian L. Tupy of Cato. Excerpts:

"Malthus had already lost his main argument before his essay even appeared in print. Between 1700 and 1798, the population of England rose from 5.2 million to 8.44 million, an increase of 62.3 percent. Over the same period, nominal GDP per person rose from 12.37 British pounds to 23.97 pounds, an increase of 93.8 percent. The nominal price of a four-pound loaf of bread, a staple that fed much of the poor, rose from 5.2 pence to 7.4 pence, or 42.3 percent. Because incomes rose much faster than the price of bread, the latter became 36.2 percent more abundant, not less."

"Human beings are not trapped in the same ecological logic as bacteria in a dish or buffalo on a plain. We exchange with one another. We build institutions. We create tools. We improve production methods. We substitute one material for another. We grow more from the same soil—sometimes much more. In other words, we create new knowledge."

"Higher prices signal a problem. Those higher prices then encourage knowledge creation, and new knowledge leads to greater abundance."

"The Simon Abundance Index, which Dr. Gale L. Pooley and I publish every year on Earth Day, is named after Julian Simon. It is a deliberate continuation of the quantitative analysis of the relationship between population growth and resource abundance that Simon’s bet with Ehrlich began. Unlike Simon and Ehrlich, who measured the abundance of resources in inflation-adjusted dollars, we look at “time prices.” Money prices are distorted by inflation and disputed deflators. Time prices solve that problem by dividing a good’s money price by hourly income, showing how long a person must work to buy it. They capture both falling prices and rising wages, require no inflation adjustment, and allow comparisons across countries and centuries. Time is universal, cannot be printed, and reflects the real cost people pay: hours of life. Time prices provide a clearer, simpler, and more meaningful measure of resource abundance than money prices for ordinary people."

 

"By this measure, the last 45 years have been a rout for the pessimists. The 2026 report says that the Simon Abundance Index stood at 636.4 in 2025, up from a base of 100 in 1980. That means Earth was 536.4 percent more abundant in 2025 than in 1980. All 50 commodities, including fuels, such as crude oil, coal, and natural gas, food, such as chicken, beef, and lamb, and metals, such as aluminum, copper, and gold (yes, even gold!), in the dataset were more abundant in 2025 than they were in 1980. The global abundance of resources increased at a compound annual rate of 4.2 percent, doubling about every 17 years. In the 42 countries tracked by the report—accounting for 85.9 percent of global gross domestic product and 66.3 percent of the world’s population—none saw lower resource abundance in 2025 than in 1980. That is not what a species trapped in Malthus’ arithmetic is supposed to produce.

The mechanics of that gain matter. Between 1980 and 2025, time prices for the 50 commodities fell by an average of 70.9 percent. What required an hour of work in 1980 required about 18 minutes in 2025. The same hour of work that bought one unit of a typical commodity in 1980 bought 3.44 units in 2025. That is a 244 percent increase in personal resource abundance. At the same time, the world population grew by 85 percent, from 4.44 billion to 8.21 billion. Put those two changes together and you get the index’s central finding: For every 1 percent increase in global population, population-level resource abundance grew by about 6.3 percent. Resources growing at a faster pace than the population is what Pooley and I call superabundance. It is the opposite of Malthus’ conjecture that each additional person leaves less for everyone else.

The critics sometimes retreat to complaining about the short-term noise, as though any temporary spike in prices confirms the Malthusian creed. Our report addresses that, too. In 2025, 27 commodities became more abundant, and 23 became less abundant. The abundance of oranges rose the most, by 65.6 percent, while coconut oil’s abundance fell the most, by 36.3 percent. But commodity markets always swing because weather changes, disease hits crops, wars disrupt transport, and investment arrives late or early. Simon never argued that every price falls every year in a straight line. He argued that scarcity signals provoke adjustment. A temporary setback is not a vindication of Malthus. It is often the first stage of a correction. That is why the long trend matters more than the annual changes.

Our findings do not show that pollution is imaginary or that every environmental question has been solved. It has not. But environmental problems should be addressed as side effects of human flourishing, not as evidence that human flourishing itself is a mistake. The Earth Day mentality blurred that distinction. It converted planetary stewardship into misanthropy. It taught millions to look at a growing population and see only a burden, never a contribution. It treated the human animal as uniquely destructive when, in fact, people are the only animals who can recognize ecological damage and fix it. It is new knowledge—human knowledge—that gives societies the capacity to clean rivers, regulate toxins, build sewage systems, improve fuel efficiency, and move from dirtier technologies to cleaner ones. A poor society burns what it can find and dumps what it cannot manage. A rich society can afford scrubbers, pipelines, wastewater treatment, research labs, and better rules.

The green extremists often speak as though abundance is the disease, when in fact abundance is usually what makes environmental improvement possible. And so, despite half a century of doomsaying, the Earth is not collapsing under the weight of humanity. It is supporting far more people who can command far more resources with far less labor than their predecessors could. That is not the picture of a planet in terminal decline. It is the picture of a planet made more habitable by the one species clever enough to improve it. The Earth is not a museum piece. It is a working planet inhabited by learning beings who desire and are entitled to flourish."