A Tale of Two Samples: Unpacking Recent Trends in Industrial Concentration

By Robert Kulick & Andrew Card.

"Abstract

We use publicly available data from the U.S. Census Bureau’s quinquennial Economic Censuses to examine trends in industrial concentration in the U.S. economy from 2002 to 2017. We find that, contrary to the popular narrative, industrial concentration is not rising and actually declined from 2007 to 2017. A notable difference between our methodology and previous studies using Economic Census data is that we use all available six-digit NAICS industries to conduct a cross-sectional analysis of industrial concentration levels in each Economic Census year, while previous studies have excluded industries subject to redefinition over time. When attention is restricted to only “comparable industries,” we find, as with previous studies, that average concentration increased modestly from 2002 to 2017. We then show that restricting attention to comparable industries is problematic from a sample selection perspective as the sample of comparable industries exhibits substantially lower levels of concentration in 2002 than the set of industries later subject to redefinition in subsequent Economic Census years. The problematic nature of relying on the comparable industries sample to characterize economy-wide trends in concentration is confirmed by evidence that concentration levels in the comparable industries sample display significant mean reversion over time. Thus, finding a trend towards increasing concentration in this sample may, to a significant extent, reflect the role of transient economic shocks. Furthermore, to the extent changes in concentration are systematically related to competition and economic outcomes, we find that increases in concentration are correlated with increased output, increased employment, and higher wages. Case studies from the retail sector and the taxi industry provide examples of situations where increasing industrial concentration is the direct result of increasing market competition."

“Housing First” Homeless Policy Gets a Critical Look

By Vanessa Brown Calder.

"“Housing First” homeless policy is drawing new critical attention. A NYTimes article reports the predominant homeless policy philosophy is drawing criticism from Republican policymakers, conservative think tanks, as well as groups (like programs that require sobriety) that have been denied funding by the no‐​strings‐​attached permanent housing philosophy.

Meanwhile, a new Politico article details how red and blue state policymakers are desperate to avoid becoming another San Francisco, “with rents and home prices that are unaffordable for many residents and intractable waves of homelessness” and so are proposing or adopting zoning reforms to increase supply and reduce rents.

It is a good thing that Housing First is receiving a closer look by researchers and policymakers, because Housing First has sailed along for the last 20 years or so with minimal scrutiny. As we detail in a recent Housing First study, Housing First locations like California and Utah have been unsuccessful in reducing homeless counts under the policy. On the contrary, chronic homelessness in these states has grown substantially (93 percent and 95 percent) since policy adoption.

Moreover, the most recent reporting indicates that Housing First continues to fail at reducing homelessness in these places. Yesterday, a NYTimes article reported that the homeless population in Los Angeles had grown another 9 percent compared with a year ago, and a new report from Utah’s Department of Workforce Services found that chronic homelessness nearly doubled since 2019.

Comprehensive regulatory reform to increase housing supply is an important part of the answer to homelessness. But although many policymakers are considering pro‐​housing, there is a long way to go. The Washington Post reports that “many ‘progressive cities’ have cracked down on unsheltered homeless adults…without ‘addressing structural issues, like lack of housing.’” Some policymakers, like Colorado Governor Polis, have proposed a variety of excellent regulatory reforms, so far without successful adoption.

Lack of affordable, available housing is an important factor driving homelessness. Though Housing First prioritizes permanent housing subsidies for the homeless, it doesn’t prioritize the policy reforms needed to keep housing accessible and affordable so that people stay in their homes to begin with. From this perspective, “Housing First” is a misnomer and policymakers would do well to rethink it."

Update Schedule A! (occupations experiencing shortages)

By Alex Tabarrok.

"Since 1965, the U.S. has maintained a list, known as Schedule A, of occupations experiencing shortages. Employers recruiting foreign workers in these occupations are eligible to receive streamlined authorization from the federal government….because the federal government already recognizes that workers in Schedule A occupations are in short supply, employers do not need to prove it themselves. That will mean faster processing times — cutting an average of 300 days worth of red tape.

Makes sense! But get this. DOL has not updated the list of occupations experiencing shortages since 1991! Today, the only jobs on Schedule A are nurses and physical therapists. That can’t possibly be right. Many of today’s jobs didn’t even exist in 1991 including:

• • Data Scientist
  • UX Manager
  • Cloud Services Specialist
  • Drone Operator
  • Renewable Energy Engineer
  • Machine Learning Engineer

and  there must be other jobs that have experienced shortages since that time! Thus,  Lindsay Milliken and Josh T. Smith writing in the Salt Lake Tribune have a proposal.

Our proposal is simple — DOL should update Schedule A through a transparent, data-driven process every year. Government agencies already collect data about supply and demand conditions in occupations across the country. This data should be used to help speed the visa process for occupations in shortage and make sure our immigration system addresses today’s labor market needs."

The “New Right” Illusion: Oren Cass's Flawed Vision of Top-Down Governance and the Betrayal of Capitalism

By Vance Ginn.

"Oren Cass, founder of the think tank American Compass, presents a vision of the “new right” in his recently released book, Rebuilding American Capitalism. In it, he advocates for a top-down approach to governance in response to what he perceives as free-market failures. 

He tends to believe that certain politicians can and should shape markets to achieve desired outcomes rather than letting free markets, which are free people, work. This attempt to rebrand not only the right but capitalism itself is flawed, as history and sound economics prove. 

Cass pinpoints growing concerns in the economy to help bolster his arguments, like poor inflation-adjusted wage growth and lack of strong social and family units. These are problems making it harder for people to prosper, but they are not, as he suggests, evidence that free-market capitalism has failed. 

But these problems–if they are problems, as Scott Winship and Jeremy Horpedahl recently found that people are thriving–aren’t the results of free markets but are driven instead by government failures. 

These failures include bloated government spending, restrictive regulations, high tax burdens, excessive safety net programs, costly tariffs, and other barriers to entry in the marketplace. They are imposed by politicians and government bureaucrats, hindering competition, disrupting entrepreneurial endeavors, impeding wage growth, and destroying human flourishing.

Cass contends that capitalism only works under the right conditions, which must be facilitated by the government to keep the labor market and the economy strong. Rather than what he calls the “Old Right’s market fundamentalism” of fewer regulations and less government intervention being best, he welcomes more government with certain politicians in power. He proudly makes markets the scapegoat and, with it, globalization and financialization.  

In the book’s foreword, Cass writes:

Globalization must be replaced with a bounded market that restores the mutual dependence of American capital and labor and invites the trade and immigration that benefit American workers. Financialization must be reversed so that both talent and capital in pursuit of profit find their best opportunities in productive investment rather than extraction and speculation.

Believing that more opportunities in the form of globalization inhibit rather than help Americans is the same faulty basis with which people discourage immigration and trade, which are central to thriving economies. 

But the crux of Cass’s theory is that he believes markets must be molded, even referring to work by the father of modern economics Adam Smith. Conveniently, he fails to cite the economist Frederick Hayek, who built on Smith’s ideas, to identify spontaneous order, the basis of free-market capitalism that argues economic growth and prosperity arise from voluntary transactions by free people, not government guidance and control. 

This “new right” idea was debunked long before Cass came along by Hayek (and others), who also highlighted the “knowledge problem” associated with central planning. He argued that no central authority can possess the information necessary to make efficient decisions for an entire economy. The complexity of economic interactions and the constant flux of information require decentralized decision-making and market mechanisms to aggregate and incorporate local knowledge effectively.

Hayek’s insights emphasize the limitations of top-down control and the importance of allowing market forces and individual actors to shape economic outcomes based on their localized knowledge and preferences from the bottom-up. But Cass would have it that government is heralded as the keeper of knowledge and the arbiter of good decisions rather than encouraging freedom and liberty in individuals, i.e., the essence of capitalism.

Capitalism allows individuals to pursue their economic aspirations and make decisions based on their knowledge and preferences through voluntary exchange within rules of the game set by limited government. Through this freedom, innovation, entrepreneurship, and competition thrive, leading to greater prosperity for all.

History is full of successful economic transformations driven by leaders who championed limited government and free markets.

Former President Calvin Coolidge cut government spending, cut taxes, and reduced the national debt, providing more paths for human flourishing. Likewise, former President Ronald Reagan cut taxes, tried to rein in government spending, and reduced regulations, unleashing economic growth and job creation. 

Both of them understood that cutting spending, reducing taxes, and removing excessive regulations create an environment where businesses thrive and workers can benefit. Their approaches embraced the power of individual freedom and self-determination, not top-down control that breeds the opposite.

Oren Cass’s theory of the “new right” and its embrace of government fundamentalism misunderstands the principles of capitalism and human behavior. Top-down approaches, rooted in centralized control and regulation, do not lead to economic prosperity or personal freedom no matter who is in charge but do distort the efficient allocation of resources, undermine the adaptability of markets, and reduce opportunities to let people prosper. 

To achieve a thriving and prosperous economy, we must adhere to and strengthen the principles of free-market capitalism, which too much of our economy today is deprived of when considering healthcare, education, transportation, manufacturing, and the labor market. This should include embracing limited government, voluntary exchange, and individual freedom as the pillars of strong families, productive workers, and profitable employers. 

Economist Milton Friedman noted what this debate is about decades ago. “The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system.” And while “history suggests that capitalism is a necessary condition for political freedom,” it’s clearly “not a sufficient condition.”

But capitalism is the best system yet that has supported economic prosperity and political freedom. The problem is that we have had too little free-market capitalism for people to thrive because of too much government. 

There’s no need for a “new right” of big-government progressive policies offered by Cass and others when free-market capitalism of the “old right” is too often missing in our lives."

The Neo-Brandeisians Are Wrong About Greedflation

By Barak Orbach. He is a Professor of Law & Business at the University of Arizona. Excerpts:

"The White House took advantage of inflation to pursue its Neo-Brandeisian antitrust agenda but quickly found that its arguments for stricter antitrust as an antidote to inflation were irreconcilable with economic realities. The White House Council of Economic Advisers reportedly objected to theories tying inflation to corporate power and then Director of the National Economic Council Brian Reese likewise tried to soften the White House’s position that antitrust could reduce inflation.  

The 2023 President’s annual economic report similarly distanced the White House from assertions that unchecked economic power was the culprit for soaring inflation. The report recognized that some argued that “increased market concentration in U.S. industries” had contributed to the spike in inflation, and that “[t]here is some evidence that these firms [raised] prices in response to cost increases more than firms without market power would have done in the past.” However, the report also stated that “the link between market power and pricing when subject to shocks like the pandemic is not clear. . . . Measuring market power is a difficult task, and measuring the prices firms charge above the cost of their inputs, their ‘markup,’ isolated from the effects of the increased demand and constrained supply of 2022, is even more fraught.”"

"The United States saw high inflation in the eras that contemporary antitrust crusaders describe as antitrust’s golden age. In contrast, for several decades until the onset of the COVID-19 pandemic, the U.S. experienced a period of relatively low inflation, although many industries became considerably more concentrated during that period."

"Compared to the high inflation periods of the 20th century, the post-pandemic inflation surge was modest. If we take seriously claims that the vigor of antitrust enforcement affects inflationary pressures, we should explore why inflation soared in periods of aggressive enforcement in the 20th century. For example, assuming that macroeconomic conditions are irrelevant, one may advance the following speculations:

1. The trust-busting campaigns of the early 20th century caused the inflation boom of 1916-1920.
2. The rise of antitrust enforcement in the 1930s enabled the inflation spikes of the 1940s. 
3. The anti-bigness movement of the 1960s caused the Great Inflation (a period of recessions and high inflation).
4. The reorientation of antitrust law that began in the late 1970s ended the Great Inflation era and decreased macroeconomic volatility.
5. “Techlash,” antitrust populism, and the stacking of the antitrust agencies with crusaders induced the current inflation surge.

The difference between the foregoing baseless hypotheses and antitrust greedflation theories is the attitude toward large corporations. For some, the key explanation for undesirable economic and social conditions is government actions, while, for others, corporate greed is the explanation. 

The word “greedflation” is a relatively new political meme, yet theories linking antitrust and inflation theories are far from novel. In his 1952 book, American Capitalism, economist John Kenneth Galbraith noted that, during the post-WWII inflation surge, many believed that rigorous antitrust enforcement could keep prices down and prevent inflation. Galbraith was skeptical of this belief, noting that “the American radical has an unfailing formula” for most economic problems: “demand that the antitrust laws be more rigorously enforced.” Using this unfailing formula, in 1966, Attorney General Nicholas Katzenbach contended that “strong antitrust policy against concentration helps to promote economic growth by making inflation easier to control.” Likewise, in the 1970s, facing an inflation spike stemming from the oil crisis, the Nixon administration blamed the anticompetitive practices of concentrated industries. Thomas Kauper, then the head of the Department of Justice’s Antitrust Division, maintained that strong antitrust enforcement was crucial to the fight against inflation. His counterpart at the FTC, Chair Lewis Engman, emphasized the Commission’s commitment to conduct “an extensive investigation” to ascertain whether the food and oil industries “were limiting competition in an attempt to drive up prices in violation of the antitrust laws.”"

"Greedflation theories beg the question of why greedy corporations did not inflate their profit margins before the pandemic. UBS Chief Economist Paul Donovan answered this question, arguing that developed economies experienced profit-margin-led inflation, which he defined as conditions in which “some companies spin a story that convinces customers that price increases are ‘fair,’ when in fact they disguise profit margin expansion.” Donovan observed that companies whose business models rely on customer loyalty ordinarily pass on cost increases, but do not expand profit margins. If consumers feel that prices are rising unfairly, they will abandon the company. However, such companies can use inflation, uncertainty, and external shocks to justify price increases without creating a consumer rebellion. This explanation rests on sound economic principles that address market friction and fairness perception. It has long been understood that companies—small and large ones—can and often do exploit market friction profitably by circumventing fairness perceptions. Be that as it may, antitrust greedflation theories conveniently ignore the global rise in inflation rates. The notion that permissive antitrust policies in the U.S. drove inflation rates around the world seems far-fetched.

There is a broad consensus among economists and antitrust experts that “competition policy should not be seen as a prominent short-term anti-inflation tool.” The recent flirtation with antitrust greedflation theories aligns with past instances of reckless political maneuvering. It also mirrors the propensity of antitrust populists to propagate misleading, sensational claims. The media’s extensive rejection of these theories suggests that the fervor fueling antitrust populism in recent years has started to wane. The most significant insight that antitrust greedflation theories offer is that political greed sometimes leads to inflated exaggerations, diverting resources toward political memes at the expense of the public."

Norway’s Wealth Tax Is Backfiring. Are Americans Paying Attention?

By Jon Miltimore. Excerpts:

"“More than 30 Norwegian billionaires and multimillionaires left Norway in 2022, according to research by the newspaper Dagens Naeringsliv,” reports wealth correspondent Rupert Neate. “This was more than the total number of super-rich people who left the country during the previous 13 years, [the paper] added.”

Did you catch that? More “super rich” Norwegians left Norway in 2022 than during the previous 13 years combined. The reason wealthy Norwegians are fleeing the country is not a secret. 

Following its 2021 electoral victory, the Nordic nation’s Labor Party made good on its promise to soak the rich. Norway is one of just a handful of OECD countries that still taxes net wealth, and the Labor Party increased the country’s wealth tax to 1.1 percent despite warnings that such a move would “trigger capital flight and threaten job creation.”

Capital flight is exactly what happened, and it has left the Norwegian government with less revenue. 

Norwegian Business School professor emeritus Ole Gjems-Onstad estimated that the wealthy Norwegians took with them a total fortune of $54 billion when they left. This means that the wealth tax, which was projected to increase revenue by nearly $150 million annually, will result in about 40 percent less revenue than it currently generates. Luca Dellanna, a management advisor and author, points out that Norway collected about $1.46 billion on its wealth tax in 2019. But the exodus of the wealthy will result in an estimated $594 million in lost revenue."

Bidenomics Unveiled

By Douglas Holtz-Eakin.

"The president is speaking in Chicago today where he will outline “Bidenomics” – putatively his signature approach to economic policy. What is Bidenomics? A White House memo from two of his top advisers and administration talking points provided some hints.

Per these previews, Bidenomics is built on the three pillars of (1) smart public-sector investment, (2) improved competition, and (3) empowering workers. More on these pillars in a bit; just know that they are supposed to have done wonderful things. For example, the president “faced an immediate economic crisis” that Bidenomics cured.

False. When the president took office, the economy was growing at a rate of 6.3 percent. It is 1.3 percent now. Unemployment had fallen from 14.7 percent in April 2020 to 6.3 percent in January 2021. The momentum on both fronts has only diminished in response to a dose of Bidenomics.

Some of the other claims are simply pathetic. The assertion that “President Biden reduced the deficit by $1.7 trillion” has been widely debunked, and earned a “bottomless Pinocchio” from the Fact Checker at The Washington Post. Houston, if your only defense of your economic policy is something already proven wrong, you have a problem.

What about the pillars? In its analysis of infrastructure legislation, the Congressional Budget Office concluded that moving $1 of investment from the private sector to $1 of government investment means giving up half of the rate of return. Is that “smart”? If you are throwing hundreds of billions of taxpayer dollars at “investments” in clean energy production, is it “smart” to impose wage standards and domestic content requirements that make these investments ever-more expensive?

On competition, the administration has orchestrated its agencies’ abandonment of the consumer welfare standard. Message to voters: We plan to regulate according to our whims, not to benefit you. Terrific. When forced to trot out some evidence, we are given an executive order on ocean shipping and finishing the Trump-initiated deregulation of hearing aids. My joy at having the Danes and Thais compete for my hearing loss is immeasurable.

I presume “empower workers” means taking away their choice to join a union or not, regulating the gig economy like a 1950s factory job, and otherwise making labor more expensive, jobs scarcer, and work flexibility a distant memory.

Bidenomics is not a set of principles or programs with an internal logic or discipline. It’s a word salad in which phraseology like “grow the economy from the middle out and the bottom up” is supposed to substitute for rising real wages and respect for individuals’ preferences.

Finally, notice that Bidenomics is fundamentally backward-looking. This is an odd feature for something that is supposed to propel a candidate to a future presidential term. Voters will want to know what he intends to do with that term. They will be less interested in an elaborate messaging effort to convince them that “I’m not really as bad as my poll numbers indicate.”

The president has been in office since January 2021. Since then, we’ve experienced declining growth, record-high inflation, and redistribution to favored constituencies. Those are the three pillars of Bidenomics."

About Your Economic Record, Mr. President: It’s not all roses

Letters to The WSJ.

"Regarding President Biden’s “Never Bet Against the American Economy” (op-ed, June 9): Wouldn’t it be nice if politicians stopped referring to increasing government spending funded by borrowing as “public investments” and increased taxes as “revenues?” Such public investments aren’t a once-in-a-generation opportunity; as the federal debt has grown to exceed $31 trillion, they have become routine.

Long-term growth is a mirage, as government borrowing crowds out private investment. How are we going to win the economic competition for the 21st century in the presence of growing leakages—tax dollars siphoned by bureaucracies—inefficiencies and debt overhang?

Terence E. Burns, C.F.A.

Fairfax Station, Va.

Mr. Biden plays his greatest-hits record of misleading economic claims on inflation, wage growth and job creation. In reality, our inflation, which was a result of Mr. Biden’s reckless spending, remains persistently high. It has caused average real wages to decline for 26 straight months. His job-growth figure has been buoyed by the millions of backfilled jobs that were temporarily lost during the pandemic. He doesn’t deserve credit for these. Labor-force participation is well below the prepandemic peak.

The economy is sputtering, mired in stagflation after barely coming out of a recession during the first half of last year. According to our latest poll, nearly two-thirds of small businesses are concerned that the poor economic conditions will force them to close. The real story of the Biden economy is stagflation and declining living standards.

Alfredo Ortiz

CEO, Job Creators Network

Atlanta

Mr. Biden blames price hikes on supply chains, corporate profit margins and rents. When supply chains weaken, prices rise, but then fall once bottlenecks resolve. If the supply-side story is correct, we should see outright deflation now. Instead, we’re experiencing mere disinflation—a slowdown in the rate of price increases.

The corporate-profits “greedflation” hypothesis flies in the face of basic economics. When business costs rise, the markup charged by profit-maximizing firms actually decreases. Rents don’t explain inflation, either. From summer 2020 to 2022, rent increases outpaced consumer price inflation for only three quarters. Rents are growing faster now that inflation has moderated. The driver is supply and demand in housing markets, not the overall economy.

Monetary policy remains the best explanation for inflation. The monetary base grew from $3.45 trillion at the start of Covid to $6.41 trillion two years later. Mr. Biden doesn’t control the Federal Reserve, but in running massive deficits, he and his congressional allies pressured the central bank to monetize the debt.

Prof. Alexander William Salter

Rawls College of Business, Texas Tech

Lubbock, Texas"

Who Gets to Define the ‘Good’?

Barton Swaim reviews Regime Change: Toward a Postliberal Future by Patrick Deneen. Excerpts:

"Mr. Deneen believes that Western individualism has taught our liberal elite that they bear no responsibility toward those below them. Their response to any social or political problem is to blame the little guy: the white wage earner, the divorced cop, the middle-class shopkeeper. It’s certainly true that many members of our credentialed elite in the 2020s appear uniquely incapable of self-criticism, but simply to blame this on “individualism” is unhelpful. Americans have lived in an individualist culture for a long time; the pathology Mr. Deneen describes is of a recent vintage. Something else is happening.

Whatever the cause of our discontents, “Regime Change” proposes two broad remedies. The first is to reconnect with an “older tradition” of conservatism that valorized ordinary people, traditional habits and common sense. The second is to promote a “mixed constitution,” an ideal in classical political philosophy, especially Aristotle, in which upper and lower classes counterbalance the vices and deficiencies of the other.

You might be tempted to think that the American Founders already gave us a mixed system, in which the three branches of government—and the upper and lower chambers of the legislative branch—each defend separate interests. But Mr. Deneen informs us that the Constitution “arguably subverted” the mixed ideal by narrowing its concern to “mechanisms that prevented certain exercises of power, rather than developing a true form of ‘mixing.’ ” In general, he thinks the Americans Founders were so much in thrall to proto-liberal thinkers like John Locke and Thomas Hobbes that they couldn’t envision the sort of “integrated” political system he favors.

To achieve these two aims, Mr. Deneen believes, conservatives will need to promote what he calls, in one of the least usable neologisms ever formulated, Aristopopulism. (The “Aristo” prefix stands for Aristotle.) To promote a populist mixing of estates, Mr. Deneen offers a variety of proposals, including a dramatic increase to the number of U.S. House seats (which he thinks would bring more ordinary folks to the lawmaking body) and mandatory national service.

“Regime Change,” unlike “Why Liberalism Failed,” appears to be written exclusively for people who already agree with its contentions. Rarely does Mr. Deneen anticipate a counterargument. Caricatures abound. In a discussion of American conservatism, the only proponents of classical liberalism he mentions are the “objectivist” weirdo Ayn Rand and a posse of “Never-Trumper” journalists. Milton Friedman and Friedrich Hayek are nowhere to be found. 

Mr. Deneen’s habit of misrepresenting beliefs he dislikes doesn’t prevent him from borrowing from them when the need arises. Consider the point about reconnecting with an “older tradition” of conservatism that esteems the insights of ordinary people. His account leaves the impression that no serious conservative writer in the past hundred years defended the values and habits of unlearned people. “Common-Good Conservatism,” he writes, as if announcing a new doctrine, “aligns itself in the first instance with the ‘common sense’ of ordinary people especially because they are the most instinctively conservative element in a social and political order.”

Of course, if you’ve read Michael Oakeshott’s “Rationalism in Politics,” say, or the essays of Irving Kristol or Thomas Sowell—or even if you’ve heard William F. Buckley’s quip that he would rather be governed by the first 2,000 names in the Boston phone book than by the faculty of Harvard—you were already aware that this theme is basic to the conservatism Mr. Deneen ridicules as “right-liberalism.” He has, in fact, read Oakeshott’s famous book, which he cites on page 205 in “Why Liberalism Failed.” And it is inconceivable that he hasn’t read Kristol and Mr. Sowell and scores of other conservative intellectuals who’ve defended the mores of the uncredentialed against their cultured despisers. Forgive me if I begin to suspect that Mr. Deneen is not entirely on the up and up.

The true but sublimated strand of conservatism Mr. Deneen purports to revive includes very few names, but one is Edmund Burke (1729-97). It strikes me as possibly amiss to recruit the author of the phrase “swinish multitude” into the cause of populism, Aristo or otherwise, but I am willing to consider the case. When I try to follow Mr. Deneen on the subject of Burke, though, I feel none the wiser. Did Burke foresee the threat of “rising business interests” in England, as Mr. Deneen asserts? Maybe, but when he quotes the great Irish statesman as denouncing “sophisters, economists, and calculators,” I consult the citation to “Reflections on the Revolution in France” and discover that Burke was not talking about English bankers and capitalists but about the arrest, in his view disgraceful, of Marie Antoinette (“the age of chivalry is gone. That of sophisters, economists, and calculators has succeeded”). Mr. Deneen goes on to quote Burke’s denunciation of French and English speculators (“gamesters”), also in “Reflections,” as if these passages indict capitalism or “business interests”; but Burke, as I read him, is there inveighing against loose monetary policy and attendant inflation, commonly criticized by the free-marketeers Mr. Deneen abhors.

The difficulty with which Mr. Deneen shoehorns Edmund Burke into his anti-liberal vision is one of many signs of that vision’s incoherence. Obvious contradictions go unaddressed in “Regime Change.” Mr. Deneen, happily echoing Karl Marx’s criticism, laments the ill social effects wrought by the division of labor. But a major part of Mr. Deneen’s common-good agenda involves bringing manufacturing back to the homeland. Well, which is it—more assembly lines or fewer? 

Mr. Deneen wants a traditional society that “appears ignorant in the eyes of ‘experts,’ but in fact is constituted by a deep well of experience and common-sense wisdom.” But he also wants a more expansive welfare state that supports low- and middle-income earners—one that, as Mr. Deneen describes it, uses “the power of the state to secure social safety nets targeted at supporting middle-class security.” Who does he think will manage the new welfare programs he would create? A lot of Ivy-educated “experts” and consultants with big ideas on how the ignorant masses should arrange their lives, that’s who. 

There is a cultivated perversity about the entire common-good, postliberal project. The liberal order, as it’s perhaps misleadingly called, was never the philosophically cohesive “regime” Mr. Deneen pretends it to be. It was, and for now remains, an imperfect and uneasy settlement between disparate, sometimes antipathetic factions that nonetheless find it expedient to live peaceably with each other on the basis of shared, or at least stated, ideals. But Mr. Deneen and his common-good allies prefer to define “liberalism” as a deliberately formulated “project” because only then can they pretend to draw up plans for its overthrow and redefinition according to their own ideas of righteousness.

He castigates “right-liberal” faux-conservatives, as he thinks of them, for making conservatism an “empty, relativistic label” that changes shape according to progressive whims. In the world he prefers, conservatives use state power for their own ends and don’t have to worry about what progressives will do with that power when they get it. 

Mr. Deneen and his fellow common-gooders are, in one sense, model progressives. If progressivism, both in its early-20th-century and present-day varieties, can be distilled into a single belief, it is that the way to solve any social or political problem, however tangled, is to put us in charge. For my own part, I would rather be ruled by the first 2,000 people in the phone book than by Patrick Deneen and his pals."

High Fructose Corn Syrup and the Sugar Quota

By Alex Tabarrok.

"A viral tik-tok video compares the ingredients in American Heinz ketchup with those in Canadian Heinz ketchup. The American version contains high fructose corn syrup (HFCS) while the Canadian one contains sugar. An an economist I can’t tell you whether, “this is why America makes you sick” but I can tell you why the American version doesn’t contain sugar. It’s the sugar quota!

The American sugar quota taxes any imports above a small amount at a very high rate. As a result, the US price of sugar is typically about twice the world price of sugar. The higher price of sugar means that US consumers spend billions more for candy, soda and other products and American sugar farmers increase their sales and profits. But the high price also incentivizes producers of goods that need a sweet kick, including Heinz, to substitute with high fructose corn syrup. Americans are the biggest consumers of HFCS in the world.

The two effects of the higher price–raising the price of domestic sugar and causing substitution towards high fructose corn syrup–illustrate the peculiar political economy of the sugar quota. Most obviously, the sugar quota is supported by domestic sugar producers, including the infamous Fanjul brothers, but it’s also supported and indeed was lobbied for by Archer Daniels Midland the inventors of HFCS! Even though the two sides sit together uneasily, there has apparently been enough profits to go around."