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My UK Telegraph column today is on the likely impact of the country’s sugary drinks tax. The levy, as ever, is being justified on the basis it will internalize the “social costs” of obesity.

There’s a ton of obvious problems. Sugary drinks make up less than 2.5 percent of overall adult calorie consumption in the UK—a drop in the dietary ocean. For young kids, fruit juice is a bigger source of sugar. Obesity, of course, is not simply determined by sugar intake, or even diet either. And it’s not even clear what the social costs of obesity are (above and beyond the private costs—such as lost productivity and worse health), though the UK’s socialized healthcare system complicates matters here.

That all to one side, beneath the line comes a great comment from Tim Hammond highlighting a general under-appreciated problem of using Pigouvian taxes to deal with externalities:

The basic premise of the tax is wrong – externalities should only be taxed if they cause external costs at all levels. Otherwise they should be taxed only at the levels when they start to be damaging. It is obvious (to all except the zealots) that drinking one can of Coke a year is not remotely harmful, either to me or to the NHS (even with the most dodgy claims). So why tax that?

Unit taxes are a blunt instrument to deal with the actual social costs politicians purport to care about.

Think of another example: alcohol taxes are designed in part to ameliorate the social costs associated with alcohol-related crime or driving under the influence. But it might be that some consumers generate these kinds of externalities every time they drink, while others who merely enjoy a glass of wine with their dinner never do. Yet both would face the alcohol taxes designed to mitigate the social problems.

Of course, it may be that taxes are the only practical way of at least trying to account for the externalities. Assessing people for driving under the influence or whether they smoke around young children might be much more costly, both for the government and the regulated. But one can imagine in many instances more targeted ways of dealing with the externalities, such as revoking licenses of drunk drivers.

Tim’s central point though is right: Pigouvian taxes are not clean ways of dealing with external effects of activities. Markets are not perfect in the traditional “perfect competition model” sense. But nor are they “perfectable” by governments.


Cross-posted from

By any objective measure, the degree and nature of U.S. reliance on imports of steel and aluminum do not threaten national security. President Trump’s claiming so was a smokescreen. The president wanted the domestic authority to impose tariffs, and invoking Section 232 of the Trade Expansion Act of 1962 was a foolproof way to get it.

The statute gives the president the broadest possible discretion to define and mitigate a “national security threat.” Because he can modify the tariffs or exempt countries from its reach practically on a whim, Trump has amassed the leverage he wants to bend U.S. trade partners to his will: Buy more U.S. products and I’ll drop the tariffs! Curtail your exports and I’ll modify the scope! Ramp up your NATO spending and I’ll call off the dogs!

Those who share Trump’s worldview might call this strategy ingenious. It is certainly unconventional, provocative, and possibly unhinged. Whatever you call it, Trump’s gunboat diplomacy is a major departure from the policy continuity of the last 13 U.S. administrations, and it presents a grave threat to the international trading system and the global economy.

Not since Herbert Hoover has a U.S. president been so cavalier about the consequences of protectionism. Never has a president been more dismissive of the importance of trade to our prosperity and security. Never has a president been so impervious to the lessons of history.

On trade, Trump is one-dimensional. He sees deficits as proof that the United States is losing at trade (and losing because the foreigners cheat). A winning policy, he believes, would produce trade surpluses. But, if that’s true for the United States, it’s true for all countries and since all countries can’t run surpluses, trade can’t possibly be an exercise in cooperation and mutually beneficial exchange. To Trump, trade is a survival-of-the-fittest, winner-take-all, Hobbesian struggle.

Animating this zero-sum fallacy is a sense of resentment that permeates the American nationalist narrative. Donald Trump, Robert Lighthizer, John Bolton, Peter Navarro, and others advising the president see the United States as a benevolent giant, having selflessly provided the resources, security, and generosity of spirit to rebuild Western Europe, East Asia and the rest of the free world after the war. Under the U.S. security umbrella, our allies took advantage of our kindness, short-changed the till, flaunted the rules, became economic rivals, and adopted policies that advanced their own interests at the expense of America’s industrial base. Or so goes the story.

This variant of American exceptionalism demands tribute in the form of our allies’ unquestioning support for U.S. positions on matters of foreign and economic policy, and reparations in the form of excusing U.S. policy transgressions and acquiescing in other U.S. claims to entitlement or special consideration. That the United States isn’t treated exceptionally by the World Trade Organization’s Dispute Settlement Body—which is to say with extra helpings of deference or even turning a blind eye to U.S. infractions—as recognition for America’s selfless leadership in establishing the rules and institutions of the trading system helps explain Trump’s reckless trade policy tack today.

Trump’s trade policy is all about asserting U.S. sovereignty over the presumed constraints of international law and using the leverage that comes from threatening to impede access to the world’s largest market to compel foreign governments to take certain actions. Trump reckons that countries running surpluses with the United States have more to lose from a trade war, hence his assertion that trade wars are “good” and “winnable.” While it may be true that the United States would be less weakened than other countries by a trade war (as the U.S. is much less dependent on trade than almost every other country—imports plus exports account for 27% of U.S. GDP as compared to a world average of 53%), the damage to the U.S. economy would be considerable nonetheless. But the very notion of feeling confident to threaten a trade war because U.S. “casualties” would be lighter than say China’s or Europe’s is anathema to any proper understanding of how trade and the global economy really work. Trade is not a zero-sum game, but a win-win, lose-lose proposition. Hurting our trade partners unequivocally hurts ourselves. Trump’s predecessors understood this.

U.S. importers and trading partners are all well aware of the flimsiness of Trump’s national security argument for steel and aluminum tariffs, and domestic legal actions and WTO challenges are likely to materialize. But that will take time and, in light of the so-called National Security Exception (Article XXI of the General Agreement on Tariffs and Trade) that would seem to permit governments to raise tariffs to protect national security, a successful outcome is very uncertain.

Meanwhile, foreign retaliation is no panacea. Smart governments get no pleasure from raising trade barriers because smart governments know that those barriers impose the greatest burdens on their own countries’ businesses and consumers. Even though the EU has published a retaliation list, which targets U.S. exports from states of important members of Congress, European restaurants, hotels, and households don’t want to bear the burden of paying more for their bourbon and cheese. Moreover, imposing direct retaliation instead of pursuing resolution through the WTO dispute settlement system could very well find those who retaliate in violation of the rules before the United States is ever held to account.

If there is going to be retaliation, expect it to come via copycat invocation of some bogus national security rationale. That would at least provide a similar level of insulation from WTO rebuke that probably shields the U.S. steel and aluminum actions. One could imagine the EU going after Google, Amazon, and the other U.S. internet giants, which have been in Brussels’ cross-hairs for years. Restrictions on the kinds of information that can cross borders, data localization requirements, and other onerous rules to “protect national security,” which also happen to burden the U.S. business models, could be imposed.

Likewise, Beijing already considers China’s reliance on western technology to be a national security threat. In fact, China already has a National Security Law and a Cybersecurity Law, both of which extend unspecified and unpredictable authorities to the Chinese government to inspect U.S. information and communications technology products, and to compel U.S. companies to “share” their technology. Those practices are among the subjects of the Trump administration’s highly provocative Section 301 investigation. If China was previously on the defensive about those allegations, any inclination toward changing those policies it may have had has probably waned as a result of the U.S. precedent to invoke national security to rationalize protectionism. Now, Beijing has another option.

Of course, the significance of these national security tariffs to the future of the trading system will pale in comparison to any U.S. measures imposed unilaterally pursuant to the Section 301 investigation of China. As a WTO member, the United States cannot be judge, jury, and executioner. The United States can bring its evidence of Chinese violations to the WTO and ask for a ruling as to whether China is, in fact, in violation. If China is found to be in violation and it fails to bring its policies or practices into conformity with the WTO agreements it is violating, then the United States can pursue retaliation.

But Trump is said to be seeking a list of retaliation targets totaling somewhere between $30 and $60 billion worth of Chinese imports and is reportedly intent on pulling the trigger. Such a blatant violation of WTO rules perpetrated by the United States would signal the world that Trump is not interested in the rule of international trade law, but in asserting U.S. sovereignty at all costs. And the costs will be huge, as other governments follow suit and the once predictable global trading system descends into a wild west of anything goes lawlessness.

With all the media coverage of President Trump’s steel/aluminum tariffs, it would be easy to assume they are in effect already, but they don’t actually start until next Friday, March 23. This is from the Presidential proclamation relating to steel:

Except as otherwise provided in this proclamation, or in notices published pursuant to clause 3 of this proclamation, all steel articles imports specified in the Annex shall be subject to an additional 25 percent ad valorem rate of duty with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018.

The “except as otherwise provided” qualifier is important here. There is still time to narrow the scope of the tariffs significantly, both through specific product exclusions and broader country exemptions. Canadian and Mexican steel has already been exempted. And President Trump had a tweet suggesting Australia would be exempt: “Working very quickly on a security agreement so we don’t have to impose steel or aluminum tariffs on our ally, the great nation of Australia!” But what about other U.S. trading partners? The EU, Brazil, South Korea, and Japan, among others, are all going to be making their case to the U.S. Trade Representative, who is running these negotiations.

The criteria for exemptions for these countries is as follows: “Any country with which we have a security relationship is welcome to discuss with the United States alternative ways to address the threatened impairment of the national security caused by imports from that country.” That’s obviously pretty vague. What exactly is the U.S. looking for in these negotiations? Maybe it is looking for increased military spending by our allies. Maybe it is looking for support for the U.S. position on addressing global steel overcapacity and other trade issues. Maybe it is looking to convince these countries to “voluntarily” reduce their steel and aluminum exports to the U.S., which is an arrangement used in the 1980s, when current U.S. Trade Representative Robert Lighthizer last worked for USTR. But today’s trade world is very different from the 1980s, and it’s not clear that any of our trading partners are going to be willing to cave in to U.S. pressure.

Perhaps the best outcome we can expect here is some face-saving deals, in which other countries agree to do things they were already going to do, the U.S. grants the exemptions, and everyone can declare victory. All of this is far from ideal, but having gotten ourselves into this, it may be the best way out. Otherwise, if these tariffs are actually imposed on all of these countries, there will be significant harm to the domestic economy and the very real prospect of retaliation (by the EU in particular, but possibly others as well). 

The next week will be a mad dash of diplomacy to try to salvage something out of this mess.

I am saddened to report that Professor Ronald D. Rotunda died unexpectedly yesterday of pneumonia after a brief hospital stay. He was 73. A distinguished professor of law, Ron, as he was known to his friends, was a visiting senior fellow in constitutional studies at Cato during the 2000 calendar year. He remained a Cato senior fellow in constitutional studies until 2008 and served on the editorial board of the Cato Supreme Court Review from its inception in 2001 until 2008. After leaving Cato in 2000 he joined the faculty of the George Mason University School of Law. In 2008 he joined the faculty of Chapman University’s Dale E. Fowler School of Law where he was the Doy and Dee Henley Chair and Distinguished Professor of Jurisprudence at the time of his death.

A graduate of Harvard College and the Harvard Law School, Ron was for much of his career the Albert E. Jenner, Jr. Professor of Law at the University of Illinois College of Law. I first met him in the early 1990s when the college’s Federalist Society chapter invited me to speak there. Ron was the chapter’s faculty advisor. He picked me up from the airport in his vintage Rolls Royce. Ever the showman, he was famous for his colorful collection of bow ties, matching his colorful character. But beneath the show was a serious scholar of immense erudition. He is perhaps best known for his five-volume Treatise on Constitutional Law: Substance and Procedure, co-authored with John E. Nowak, but his scholarship covered many legal fields. His popular writings have appeared in the Wall Street Journal, the Washington Post, and beyond, and many of those works have been translated into several languages. His c.v., detailing his many appointments and honors, runs some 55 pages.

During his brief year with us at Cato, Ron was a valued member of our small Center for Constitutional Studies team and a mentor for all. We were in the early stages then of developing our now highly-regarded amicus brief program. I recall in particular a brief we filed with the Supreme Court on January 1, 2001, in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, where we offered the Court a reading of the Commerce Clause that the Framers would have recognized. While moving in that direction, the Court did not go that far, but we were pleased at least that we had shown the flag and that we emerged on the winning side. Well before that, however, Ron had contributed a chapter to the book that Ed Crane and I edited in 1994, The Politics and Law of Term Limits. And Ron contributed another chapter to my edited collection, The Rule of Law in the Wake of Clinton, which Cato published in 2000. At our website, you will find more of Ron’s contributions to Cato’s work. We will miss him. May he rest in peace.

Scientific American, which is quite reliably alarmed by the prospects of climate change, showed signs of moderation this week in an article highlighting the work of the ecomodernists. The ecomodernists acknowledge that man-made climate change is occurring, but believe humans are already (and will continue) decoupling their well-being from environmental destruction—meaning every day that passes, human flourishing requires less pollution and resources. Though not libertarians, they are spot-on in regards to climate change being a minor overlay in a world increasingly insulated from the vagaries of nature due to market forces. The piece, titled Should We Chill Out about Global Warming?, is answered with an unqualified YES! from those of us at the Center for the Study of Science.

One of their ecomodernist peers, journalist Will Boisvert, recently pondered in a piece, “How bad will climate change be?” He has a voluminous response that’s worth a read, which he quickly summarizes as “Not very.” He went on to note what many of us have been saying for years—as long as there has been capital for innovation and civil order, we’ve been adapting to climate change, and will continue to do so. Boisvert neatly skewers horseman after horseman of the apocalypse—drought, hunger and heat, and notes our increasingly clean and efficient energy technology.

In a similar vein, Nature Communications published an article by Yousuke Sato (and coauthors) from Nagoya University, showing the controversial “indirect cooling effect” of particulates that often go in the air along with carbon dioxide is much smaller than what’s in the climate models. The models are generally tuned with these aerosols to match the climate history of the 20th century, where a large warming occurs before much carbon dioxide is emitted, followed by a slight cooling for several decades as emissions ramped up. Because the aerosol cooling is large, the warming they counter must be huge—which is why in recent decades the models predict so much more warming in the lower atmosphere than is being observed.

The largest projections of future warming are driven by an emissions scenario we recently debunked, known as RCP 8.5. We noted that researchers at the University of British Columbia recently found there is simply not enough coal (recoverable or otherwise) to make these outcomes physically possible. In the Wall Street Journal, the Manhattan Institute’s Oren Cass takes a similar look at the failure of worst-case scenarios to account for human ingenuity and adaptation—calling them “laughably bad economics.” It’s based on a detailed report you can download here.

With these recent developments in science, economics, and popular perception of climate outcomes, we’re hoping the Trump Administration will take the reins of the Fourth National Climate Assessment—which was largely written in the last administration—and steer it back onto a realistic course. It’s getting ready for publication, and we submitted extensive suggestions on how to make it more accurately represent the best and newest science.

San Francisco bans signage advertising “off-premises” activity, but not “on-premises” advertising. That is, if you own a liquor store, you can advertise the beers you have for sale, but not the upcoming beer festival you’re sponsoring across town.

But advertising is a form of speech protected by the First Amendment, and if the government wants to places limits on that speech, it must adhere to the constitutional limits on its own power. A company called Contest Promotions has challenged this law. The U.S. Court of Appeals for the Ninth Circuit ruled in the city’s favor, so now the company asks the Supreme Court to take its case.

At the core of the First Amendment is a principle of non-discrimination. That is, the government can place certain limits on speech in public places, but it may not preference some speakers over others based on the speech’s content or viewpoint. The content-based distinction San Francisco makes is precisely the sort of discrimination the constitution doesn’t abide. Unfortunately, the Supreme Court has made something of a muddle in this area. In Central Hudson v. Public Service Commission (1980), it set forth a special test for what is “commercial” speech, such as advertising, which it deemed less protected than other speech. It did this presumably to be able to better police fraud—which isn’t protected regardless—but that led to an unworkable standard and a litigation mess that lower courts have been unable to clean up.

Cato has now joined the Pacific Legal Foundation to file a brief in support of Contest Promotions, urging the Court to take up the case and reconsider its blunder in Central Hudson. The Court should dispense with a bifurcated First Amendment and treat commercial speech as on par with all other forms of expression. Moreover, it should clarify the boundaries of what does and doesn’t pass muster as a content-based restriction. Such distinctions require the most rigorous review (what lawyers call “strict scrutiny”), and the government should not be able to dodge the constitutional limits on their power by appealing to vague distinctions like “commercial” versus “noncommercial” speech.

The Supreme Court should put Contest Promotions v. San Francisco front an center on its docket in big, neon letters, and put an end to the jurisprudential murkiness in this area once and for all.

Britain First is a far-right ultranationalist group” hostile to Muslim immigrants in the United Kingdom. They are active online with significant consequences for their leaders if not for British elections. The leaders of Britain First, Paul Golding and Jayda Fransen, were incarcerated recently for distributing leaflets and posting online videos that reflected their extreme antipathy to Muslims. Fransen received a 36 week sentence, Golding 18 weeks. Britain First was banned from Twitter in late 2017. Now Facebook has taken down both the official Facebook page of the group and those of its two leaders.

Like many European nations, Great Britain has much more narrow protections for freedom of speech than the United States. The United States does not recognize a “hate speech” exception to the First Amendment. Great Britain criminalizes and sanctions such speech. This case is much more interesting, however, than this familiar distinction. The Britain First takedown offers a glimpse of the future of speech everywhere.

The leaders of Facebook did not just wake up on the wrong side of the bed and decide to take down Britain First’s page. Its official statement about the ban says from the start: “we are very careful not to remove posts or Pages just because some people don’t like them.” In this case, the page violated Facebook’s Community Standards against speech “designed to stir up hatred against groups in our society.” The statement does not say which posts led to the ban but The Guardian reports they “included one comparing Muslim immigrants to animals, another labelling the group’s leaders ‘Islamophobic and proud,’ and videos created to incite hateful comments against Muslims.” I understand also that Facebook gave due notice to the group of their infractions. That seems plausible. Almost three months have passed since Twitter banned Britain First. Perhaps Facebook eventually concluded Britain First had no intention of complying with their rules.

You might think Facebook has violated the freedom of speech. But that’s not the case. The First Amendment states that Congress (and by extension, government at all levels) “…shall make no law abridging the freedom of speech.” If the United States government had banned an America First! website, the First Amendment would be relevant. But Facebook is not the government even though they must govern a platform for free speech. But that platform is owned by Facebook. They can govern it as they wish. Most likely they will govern it to maximize shareholder value.

Imagine public officials applied the First Amendment to Facebook. They would be required to offer their service to groups like Britain First regardless of its effects on other customers or returns to shareholders. In this hypothetical case, wouldn’t “free speech” lead to a taking of private property under the Fifth Amendment? Most, if not all, libertarians would agree that Facebook is well within its rights in this matter.

Some conservatives and Republicans are complaining that Facebook and Google enjoy monopolies that have given them control over online speech. They believe that these companies are imposing the views of their employees and excluding critics of the left from their platforms. Some conservatives say the tech companies should be taken over and governed as public utilities. They are calling for something like a Fairness Doctrine for online speech. That’s a bad idea, but the question remains whether Britain First has alternatives to Facebook.

They do. You need only search for Britain First and Gab to find the links. Indeed, Facebook appears to have a new Britain First official page.

Facebook faces some challenges here. They have values and rules that reflect both the commitments of their leaders and their business model. However, if their interpretation of acceptable speech becomes as narrow as the definitions now dominant at some universities, political (and perhaps business) troubles will follow. No one should welcome such troubles for such a successful enterprise. But such troubles can best be avoided by being “very careful not to remove posts or Pages just because some people don’t like them” and taking steps to maximize the perceived legitimacy of their moderation decisions.

Everything I have said to this point assumes Facebook decided to ban Britain First for business or other reasons. But British Members of Parliament severely criticized Facebook late in 2017 for hosting extreme speech. Perhaps British officials successfully bullied Facebook into taking down the Britain First page. If so, we are getting a glimpse at an ugly future in which government cracks down on speech through private intermediaries thereby (in the United States) bypassing the protections offered by the First Amendment. This danger is the thorn in the rose of Internet speech.

In this case, I am skeptical that Facebook has given in to government threats. As noted, the takedown came three months after the official criticism. By waiting this long to act, Facebook appears to have withstood criticism from both the British government and private citizens.

Facebook’s actions suggest how to keep government out of political speech. Set and publicize clear standards for your platform and then enforce them fairly. When they are applied, state your reasoning publicly, so high profile cases can illustrate the precise contours of more general standards. To that I might add: engage your most persuasive critics thereafter and seek precedential coherence for your common law of content moderation.

Of course, none of this will matter unless the leadership of Facebook (and other tech companies) are willing to stand up to government bullies who seek a way around the First Amendment. Nothing is going to be more important in the days to come than making sure the governance of online speech is truly private.

February is a short month, so March caught me by surprise. Hence the late Dispatch. But if February had 31 days, it would be like this came out on March 11. Not that bad, right? Anyway, on with the February battles, which are heavy on books, slavery lessons, and…dances.

  • Books: February saw three new book challenges: Both The Adventures of Huckleberry Finn and To Kill a Mockingbird were removed from required reading lists in Duluth, MN; Stick was removed from all classrooms and libraries below the high school level in Beaverton, OR; and The Hate U Give was pulled as an assignment in Springfield, MO. Three of these books are not newly contested territory in our public schools’ constant values and identity-based battles. Huckleberry Finn and To Kill a Mockingbird have been flashpoints for decades—and the latter, several times in the last few months—while we saw a battle over The Hate U Give in Texas in 2017.
  • Slavery illustrations: A teacher in Leander, TX, assigned students to draw pictures of themselves as slaves for homework and to “write one sentence that describes your surroundings using each of the 5 senses.” A New York City teacher made her African-American students lie down on the floor and then she stepped on their backs to try to give them a sense for how slavery felt. Needless to say these things disturbed many parents. But they aren’t the first concerning “immersion” assignments—which seem largely intended to help kids get a better feeling for historical events—we’ve tracked. In just the last few months we’ve also seen two in Georgia and one in Massachusetts.
  • Dances: Conflicts over dress codes at school dances are common—the Map has almost 10 such incidents—but in February we saw two dance-related battles that are much less familiar. Unprecedented, at least as far as the Map indicates, was a conflict in Weber, UT, over a policy prohibiting girls from saying “no” to boys who asked them to dance at a Valentine’s Day event. At issue was disempowering girls versus protecting the feelings of potentially rejected boys. The second battle was in Staten Island, New York, where the annual father-daughter dance was cancelled in an effort to end potentially discriminatory “gender-based” activities. There is only one similar dispute I could find on the Map, a 2012 conflict in Cranston, RI.

Of course there were more battles to check out, including over an offensive science project, the National Anthem, and Cool Runnings. Meanwhile, we have continued to post polls on the Battle Map Facebook page, and utterly dwarfed old voting records with a question, in the wake of the horrific Parkland, FL, school shooting, whether teachers should be able to bring guns to work. Around 5,500 people voted, with 85 percent saying “yes” in answer to “Should a teacher’s right to bear arms extend to the classroom?” 15 percent said “no.” Of course this is unscientific, but it certainly suggests that like so many things, non-negligible percentages of the population can have differing, mutually exclusive views on crucial issues. Which is, of course, why school choice is the only system of education consistent with diversity and liberty.

Can the government convict you of a crime without showing you had any understanding of the wrongdoing? Mark Ellison was convicted without any such showing and is asking the Supreme Court to take his case.

The case arises out of the tumult of 2008. A real estate company called DBSI went under during the Great Recession, like many other real estate companies at the time. But while for many this unhappy moment meant solely financial losses, for Ellison and his codefendants it meant criminal charges. Section 10(b) of the federal securities law outlaws “any manipulative or deceptive device” used to sell securities. Combined with SEC Rule 10(b)-5, this provides the primary avenue by which the government punishes securities fraud.

The government claims that Ellison and his coworkers defrauded DBSI’s customers in selling them the real-estate investment vehicles that ultimately went bust. But the jury found each innocent on most of the charges, convicting only under the “catch-all” provision of Rule 10(b)-5(c), which outlaws any fraud done “willfully”—but according to the Ninth Circuit ‘willfully’ in this context “does not require that the defendant know that the conduct was unlawful.”

This runs contrary to traditional principles of criminal law. Normally crimes require not just a bad act but also a culpable mental state, what lawyers call mens rea. The difference between murder and manslaughter, for example, is typically whether the perpetrator intended to cause the death or not. But too often these days the government has dispensed with or watered down this traditional requirement, exposing more and more citizens to criminal liability for conduct it is less and less clear should be criminalized.

In addition to watering down the mens rea requirement, the court of appeals determined that the threshold for what did or did not rise to the level of fraud depended on an open-ended test of whether a hypothetical reasonable investor might consider the information “important” in making an investment decision. The Supreme Court and most other circuits, however, have maintained that courts must consider whether, after considering the “total mix” of all the information provided in a case-specific context, the piece of information at issue was “material” to an actual investor’s actual investment decision. Following a test of materiality based on whether some theorized investor might possibly sorta-kinda-coulda thought the information was maybe material expands criminal liability past the horizon.

This case represents yet another example of the overcriminalization that has run rampant throughout our legal system. Defense lawyer and Cato adjunct scholar Harvey Silverglate has estimated that each of us unwittingly commits three felonies a day. When criminality is that capricious, the government can exploit it at its whim, punishing those who displease it through selective prosecution. This is an arrangement more befitting a banana republic than the land of the free.

Cato, joined by the Reason Foundation and law professors Julie Rose O’Sullivan, Ira P. Robbins, Jeffrey S. Parker, and Gideon Yaffe, has filed a brief authored by Paul Kamenar supporting Ellison’s petition. The Supreme Court should take Ellison v. United States and begin to roll back the rising tide of overcriminalization that threatens the liberty of every citizen.

In today’s Dallas Morning News, I have an op-ed that discusses a riddle of American immigration policy right now:

The economy is roaring, and wages are rising, yet 2017 was another year of virtually no illegal border crossings. On average, each Border Patrol agent apprehended just 16 people all year—one every three weeks, tied for the lowest rate since World War II. This is down from when Border Patrol agents apprehended an average of 261 crossers per agent in 1996.

How is this possible?

Newly released statistics from the Department of State give a plausible answer. They haven’t disappeared: they’ve become legal… . From 1996 to 2017, the number of temporary visas issued to seasonal workers on farms and other industries increased tenfold, from 23,204 to 236,695.

The figure below graphs these trends. As you can see, the housing bubble bursting briefly resulted in a crash in both legal entries and illegal entries, but as the economy has come back, the legal entries have soared, while the illegal ones have remained low.

Guest Workers and Apprehensions of Illegal Border Crossers Per Border Patrol Agent, 1996 to 2017

Sources: Border Patrol, State Department (2013–2017)

Congress should consider expanding and improving these guest worker programs. One proposal by Rep. Dan Newhouse (R-WA) would allow more H-2A guest workers to enter as farm workers, even if the job was year-round. This would benefit dairies, livestock, and other farms that currently have access to no temporary worker program. This proposal has already been included in the Department of Homeland Security appropriations bill in the House, which means that, if GOP leadership follows normal process, it should be included in the spending bill set to be voted on this month.

Another idea, which was included in last year’s spending bill, would allow H-2B workers for non-agricultural industries not to be counted against the H-2B quota if they had entered legally and returned home in the prior three years. Rep. Andy Harris (R-MD) is reportedly negotiating with House GOP leadership to have it inserted into the spending package. His idea makes sense. Congress should reward workers and employers that follow the rules, and more guest workers would be a huge benefit to both the economy and American security.

You can read my entire op-ed here.

Remember the old joke about two economists in a room, but with three opinions?

The quip is designed to highlight an important truth: that most areas of empirical and theoretical economics are contested, to a greater or lesser extent.

In most surveys you can rely on at least some conflicting opinions stemming from putting different weight on economic efficiency compared with distributional or other concerns.

In that light, the IGM Economic Experts’ Panel question on President Trump’s steel and aluminum tariffs is remarkable. Economists unanimously disagree that the tariffs will improve the economic welfare of Americans.


The federal government imposes a mandate to blend ethanol into gasoline. This “Renewable Fuel Standard” harms consumers, damages the economy, and produces negative environmental effects. The mandate has also spawned a bureaucratic trading system in ethanol credits, which the Wall Street Journal reports is bankrupting a refinery in Pennsylvania.

The rubber hits the road with that “10% Ethanol” sticker you see on the pump when you fill your tank. The sticker signifies that the government is imposing a foolish policy on the nation at the behest of a handful of selfish senators, who are bucking the interests of America’s 220 million motorists.

Nick Loris discusses some ethanol basics at And Thomas Landstreet reiterated some of the problems with the mandate in the WSJ the other day:

The corn ethanol mandate was created under the Energy Policy Act of 2005. Two years later, President Bush signed the Energy Independence and Security Act, which expanded the program by providing generous tax credits and subsidies to corn growers and ethanol blenders. It also established ambitious targets, increasing annually, for biofuels in the national fuel mix. The mandate soon diverted 40% of America’s corn crop away from the food supply.

The government-imposed shortage caused corn prices to float from long-term mean levels of about $2 per bushel to more than $8 per bushel in 2012. This extraordinary price surge prompted a range of harmful responses in the farming industry. Farmers planted 17 million new acres of corn at the expense of soybeans, wheat, hay and cotton, driving prices for those crops to all-time highs as well. Cattle farmers, unable to afford corn gluten feed, culled their herds to levels not seen in 60 years, causing beef prices to rise an incredible 60% from 2007 to 2012. Over this five-year period, the IMF food price index rose 42%.

…The country has endured a startling amount of economic disruption for what is clearly an inferior source of energy. Ethanol produces 34% less energy per volume than conventional gasoline, reducing cars’ fuel economy. As for its effect on the environment, a 2010 Congressional Budget Office study found that corn-based ethanol subsidies are terribly inefficient, with the government spending an estimated $754 per metric ton of avoided emissions—an astronomically high price tag compared with other policies. (The economics of climate change literature estimates the “social cost of carbon” at far lower levels, meaning the program is inefficient even on its own terms.)

Moreover, ethanol is too corrosive to be transported through pipelines, so trucks must transport it. Growing corn also requires more water than other crops—and the policy gave farmers an incentive to plant only corn, which depleted the soil of nutrients. A 2008 study in Science found that converting natural environments for biofuel production can produce hundreds of times more carbon emissions than the biofuels themselves would save. No wonder ethanol mandates are losing support among environmentalists.

The ethanol mandate reduces freedom and costs you money at the gas pump for no reason other than to line the pockets of corn farmers, who already benefit from billions of dollars of federal farm subsidies. The mandate is stupid policy and ought to be repealed.

Nothing about Rex Tillerson’s firing should surprise us, except perhaps its timing. Tillerson has often been at odds with his boss in the White House, whether on Russia, Iran, or North Korea. Though widely hailed as one of the ‘adults in the room,’ it’s not clear he had much influence at all on Trump’s biggest foreign policy decisions. He was widely disliked inside his own agency; civil servants at Foggy Bottom hated his insularity and his plans to massively cut the State Department’s budget and diplomatic capacity.

Even the casual cruelty of the firing should not surprise us. Sure, the President fired his Secretary of State via Twitter, while Tillerson was abroad, without apparently offering him any explanation or courtesy phone call. But from the man who fired James Comey, his FBI Director, via television while Comey was on-stage giving a public speech, this was almost polite. 

But while Tillerson’s firing has been expected for some time, it will have big implications. Tillerson may not have had much influence with the President, but he was one of the administration’s more reasonable voices. He apparently had a good relationship with Secretary of Defense James Mattis, acting as a sounding board for ideas, and both men have advocated against some of Trump’s more disastrous foreign policy decisions.

It’s always been questionable the extent to which these so-called ‘adults in the room’ could actually constrain Trump on foreign policy issues. But with the loss of Tillerson and – last week – of Gary Cohn of the National Economic Council, we will see them replaced by advisors who appear to be trying not to restrain the President’s worst impulses, but instead to indulge them. On tariffs, conflict and more, things have the potential to get a lot worse.

Mike Pompeo, Trump’s new pick for Secretary of State, will move from the CIA. In that role, he has certainly been more effective than Tillerson in building a relationship with the President. But he has also often adopted highly political stances on policy, advocating strongly for the President to withdraw from the Iranian nuclear deal, and speaking out publicly in favor of Trump’s political and policy decisions far more often than is typical for the Director of the CIA.

Pompeo’s background is in the military, not in diplomacy, and he has little experience of high-level diplomatic negotiations. And given his personal views, Pompeo is likely to strengthen many of the President’s worst instincts: he is extremely hostile towards Iran and the Iranian nuclear deal, he has been hawkish on North Korea, and – where Tillerson took a more balanced approach - has largely supported Saudi Arabia in the ongoing Gulf Crisis.

His lateral shift from CIA to State Department will also create a secondary controversy. Trump’s choice to replace him is Gina Haspel, a career veteran at the agency, and potentially the first woman to hold the job of CIA Director. She is undoubtedly a better choice than uber-hawk Tom Cotton (R-AR), who was widely expected to get the job.

So far, so good. But Haspel was also heavily involved in the rendition and torture scandals of the mid-2000s, running a rendition center in Thailand, and implicated in the destruction of interrogation tapes. Her nomination will raise all the old debates about the Bush-era torture programs, and her confirmation hearings are likely to be fraught as a result.

Even Pompeo’s confirmation hearings may produce some difficulties: during hearings for his current job, Pompeo promised to be impartial on the question of the JCPOA. Yet he has been one of the strongest and most active supporters of Trump’s decision to decertify the accord. Congressional Democrats in particular may question why he backed away from his prior promises, and whether they can trust what he says in these hearings.

Tillerson’s firing was predictable, but it opens a whole new set of concerns, from the petty (i.e., fraught and difficult confirmation hearings) to the critical (i.e., an increasingly hawkish line-up in the White House and raised risk for conflict). Rex Tillerson’s tenure as Secretary of State was hardly a success. Unfortunately, what comes after is likely to be worse.

As Anne Fuqua recently pointed out in the Washington Post, non-medical drug users accessing heroin and fentanyl in the underground drug market are not the only victims in the opioid crisis. Many patients whose only relief from a life sentence of torturing pain are also victims. That is because policymakers continue to base their strategies on the misguided and simplistic notion that the opioid overdose crisis impacting the US, Canada, and Europe, is tied to doctors prescribing opioids to their patients in pain.

Unfortunately, political leaders and the media operate in an echo chamber, reinforcing the notion that cutting back on doctors prescribing opioids is the key to reducing overdose deaths. As a result, all 50 states operate Prescription Drug Monitoring Programs that track the prescribing habits of doctors and intimidate them into curtailing the prescription of opioids. Yet multiple studies suggest that PDMPs have no effect on the opioid overdose rate and may be contributing to its increase by driving desperate pain patients to the dangers that await them in the black market.

Last month Arizona joined the list of 24 states that had put in place limits on the amount and dosage of opioids doctors may prescribe acute and postoperative pain patients. These actions are based on the amateur misinterpretation of the 2016 opioid guidelines put out by the Centers for Disease Control and Prevention and are not evidence-based.

And the Food and Drug Administration continues to promote the replacement of prescription opioids with abuse-deterrent formulations, despite an abundance of evidence showing this policy only serves to drive non-medical users to heroin and fentanyl while raising health care costs to health systems and patients.

As prescriptions continue to decrease, overdose deaths continue to increase. This is because as non-medical users get reduced access to usable diverted prescription opioids, they migrate to more dangerous fentanyl and heroin.

It is simplistic—and thus provides an easy target—for politicians and the media to latch on to the false narrative that greedy pharmaceutical companies teamed up with lazy, poorly-trained doctors, to hook innocent patients on opioids and condemn them to a life of drug addiction. But this has never been the case.

As Patrick Michaels pointed out about recrudescent opiophobia back in 2004, prescription opioids actually have a low addictive potential and when taken by patients under the guidance of a physician, have a very low overdose potential. Cochrane systematic studies in 2010 and 2012 both found an addiction rate of roughly 1 percent in chronic non-cancer pain patients. And a January 2018 study in BMJ by researchers at Harvard and Johns Hopkins examined 568,000 opioid naïve patients prescribed opioids for acute and postoperative pain from 2008 to 2016 and found a total “misuse” rate (all “misuse” diagnostic codes) of just 0.6 percent. And researchers at the University of North Carolina reported in 2016 on 2.2 million residents of the state who were prescribed opioids, where they found an overdose rate of 0.022 percent.

Until policymakers disabuse themselves of the false notion that the opioid overdose crisis is a direct result of doctors prescribing opioids to patients in pain, the opioid overdose rate will continue to climb—only the type of opioid from which victims are overdosing will change. We have already seen it move from diverted OxyContin and other prescription opioids to heroin, and from heroin to heroin plus fentanyl. Most recently, fentanyl was the predominant cause of overdoses.

The “war on opioids” being waged by today’s policymakers is, in effect, a “war on patients in pain.” If policymakers are serious about wanting to reduce overdose deaths, they should look to what has been done in Portugal, and now Norway, and end the war on drugs. If they can’t muster the political will to go that far, then they should at least put the focus on harm reduction measures, such as syringe services programs, medication-assisted treatment, and making the overdose antidote naloxone available over-the-counter.

Instead of a war on opioids, they should wage a war on deaths.

Nicholas Buccola—one of the nation’s leading scholars of Frederick Douglass—has a piece in the New York Times blog “The Stone” in which he challenges my classification of Frederick Douglass as a libertarian. Now, as I argued on Ricochet recently, there’s a point at which any such effort at classification is rather silly: it’s more important to understand the substance of what Douglass stood for than to label it. Also, any effort to classify the man as “libertarian” or “conservative” or “progressive” or whatever will depend on us defining these terms—and such definitions are complex and contentious. Another complication is the fact that there are disagreements within these groups. Randy Barnett for example, pointed out in 2007 that libertarians don’t always agree on the practical application even of the principles that they share, even on major controversies. And then there’s the fact that many of those who call themselves libertarians actually aren’t.

On the other hand, the beginning of wisdom is calling things by their right names. And classifying—well, it’s just what scholars do. So how should we label Douglass?

It’s probably best to define our terms in basic principles. What’s distinctive about the libertarian or classical liberal tradition is its overriding emphasis on the rights of the individual, as opposed to the purported “rights” of society or the state. The classical liberal begins with the idea that the individual is fundamentally entitled to freedom—to live his or her life without coercion from others. People create governments to protect them against coercion, so that they can lead their lives as they choose—and the government is therefore their servant, not their master. Libertarians apply this principle to both “economic” and “social” matters: people should be as free to run a business as they should to choose their own spouses.

Today’s conservatism and liberalism share some of these views in some ways, but also reject them in others. Conservatives hold that society is something that needs preservation per se—that it has its own just claims to survival and security—and that the individual’s rights can be curtailed to accomplish that. Today’s liberals believe that “social justice” requires the state to intervene and rearrange cultural habits and social patterns and individual rights in order to accomplish broader economic and social equality. (I’m trying to be generous, here.) And, as with libertarians, there’s a lot of debate within these groups, too, both about the merits of these values and how they should be applied.

Of these three, Douglass fits most comfortably by far into the classical liberal or libertarian category. He believed quite clearly that the individual is the sole bearer of rights, and that the government exists to protect those rights. In the messy and complicated aftermath of the Civil War, of course, it was never entirely clear how to apply these principles. But it is clear that he was not what we today would call either conservative or liberal. He did not believe in today’s “social justice” theories—he would have had nothing but scorn for the notions of “privilege theory” or “cultural appropriation” or the idea that inequalities in society are the result of social injustices instead of individual choice. His emphasis on self-reliance, on the values of individual initiative, and the possibility of personal success in a free society, make that clear. And he was certainly no conservative. He married a white woman in 1884, and was a lifelong feminist.

Buccola objects to my classifying him as libertarian because Douglass came to reject his earlier belief in non-intervention and to hold that the slaves would have been better off if the government had engaged in a program of redistribution and social control. “Douglass certainly believed that it was important to protect individuals from unjust interference,” but, at least later in life, “he did not believe this was sufficient to make human beings free.”

There’s truth to this. But the context matters a lot. Douglass was speaking of people who themselves had actually been enslaved, largely as a result of government intervention. Even the strictest laissez-faire libertarian would have little objection to the government restoring gains that it wrongfully seized to begin with. What Douglass did not believe, however, even late in life, is that government should be in the perpetual business of rearranging society in the service of “social justice.” In 1883, after the Supreme Court gutted the 1875 Civil Rights Act in the Civil Rights Cases, for example, Douglass took to the podium to denounce the decision as a betrayal of the Union cause. And yet, he also made a point of rejecting the idea that the government should devote itself to, in Buccola’s words, “counteracting the power of economic elites.” The government was obligated to protect civil rights in the south, Douglass told the audience—but it should not be in the business of seeking to enforce “social equality.” In other words, government should prohibit discrimination in places of public accommodation—but not violate property rights by forcing people to accept each other as equals on a personal basis. “Equality, social equality, is a matter between individuals. It is a reciprocal understanding.” While he despised racism, he respected the individual rights of racists. (And this speech, too, he saw fit to reprint in his memoirs.)

But there’s a more important point here: Douglass did believe that “freedom as noninterference” wasn’t enough—and libertarians agree with that. Social institutions are critical to enabling people to make the most of their lives. Civil society institutions—charities, scholarly associations, community organizations, social clubs—are all essential in a free society, as every libertarian, from Friedman to Hayek to Rand, has emphasized. The only dispute is whether these institutions should be operated by the government or by private initiative. Libertarians argue—I think persuasively—that they work better, more justly, more effectively, if run privately than by the state. And one might argue that the experience of the Freedmen’s Bureau is good proof of that. But the idea that libertarians think that noninterference alone is enough is really a simplistic caricature of libertarian thought.

And that opens another layer of complexity. Real life is far messier than the abstractions of any political theory, and particularly in the wake of a catastrophe like the Civil War and the collapse of Reconstruction. The advent of sharecropping and the peonage laws in the south show how racial oppression was produced by an interaction of private prejudice and government interference—which built a chain that could not easily be dissolved by applying the acid of any philosophical ideas in their purest forms. Like all people of good conscience, Douglass struggled with these questions, often torn between the temptation toward government intervention and the fact that respecting people’s freedom means they’ll often make bad choices. Another good example of this is prohibition of alcohol—a proposition Douglass opposed virtually all his life, despite being strongly opposed to drinking. There’s some evidence (I think rather vague) that he came to embrace prohibition late in life, but if so, it was only reluctantly.

I make clear in my book that Douglass wasn’t a “pure” libertarian—if that term means anything. Indeed, his rejection of the “state action doctrine” in his speech on the Civil Rights Cases is quite un-libertarian. But even with these factors considered, I think it’s false to say that Douglass abandoned his belief in “freedom as noninterference.” There is no evidence of his thinking that government should redistribute wealth indefinitely to accomplish lasting economic equality. He certainly did not believe in anything like a regulatory welfare state. He was a radical individualist, who, even when he did think government should intervene, confined that to removing the weights that had been imposed upon them, so that they could achieve their own individual goals.

Over a public career that lasted a half-century, Douglass took many directions, but the overriding theme of his thought was that all people are created equal, with an inalienable right to their own lives, their own liberties, and the pursuit of their own happiness, without interference from others or obstruction from the state. And I think the best label for that is libertarian.

[Cross-posted from In Defense of Liberty]

At a cost of $100,000, the city of Baltimore plans to provide 60 free buses to take students from its schools to planned anti-gun demonstrations in Washington, D.C. later this month.

Many things could be said against this decision. For instance, it openly breaks with the notional political neutrality of public schools so as to side with some parents’ beliefs against others’. It takes money away from a Baltimore City school system that, though lavishly funded, struggles with unmet basic needs “from malfunctioning furnaces to undrinkable water.” It siphons classroom time from students in desperately underperforming schools.

But there is one more thing to say against it as well: a protest outing that is ardently enabled or even meticulously organized by the authority figures in your life can be like the ninth-grade English course that ruins Macbeth or Moby Dick for you. Writes Lynda C. Lambert in the Baltimore Sun:

Marches are normally “bottom up.” They are formed by people who are not government, usually to protest something that government is doing [or not doing].

Governments do not sponsor marches, unless that government is, say, the government of China or Russia or North Korea, where governments sponsor marches all the time that show how much the people support their governments……

Part of protesting is finding your own way, for your own reasons.

Baltimore government sponsorship of this ride to D.C. demeans our kids and demeans the point of the march. And, even more than that, it demeans the concept that a march is an uprising, a beginning, a statement made by we the people to our government.

Also, on institutional encouragement of the protests, I had a piece in the WSJ last week on the Yale admissions office’s contribution.  

As for the separate question of whether compulsory attendance and truancy laws should be enforced against students for skipping school in a favored cause, I’ll see and raise: don’t enforce those laws against anyone period.

Our air traffic control (ATC) system is run by the federal government and subject to all the usual bureaucratic failures such as cost overruns, lack of innovation, a stagnant workforce, unstable finances, and ineffective leadership.

The solution to these problems is to privatize the system, as the Canadians have done with their system to great success. The Federal Aviation Administration (FAA) would continue to oversee aviation safety, but ATC operations would be moved into a private, nonprofit, self-funded company.

A recent Washington Post headline was “FAA botched $36 billion effort to modernize air traffic system, report says.” They point to a new report by federal auditors, which is the latest of many similar reports going back decades.

When will Congress finally say “enough” and pursue an overhaul?

Here are highlights from the WaPo:

The Federal Aviation Administration has mishandled a $36 billion project to modernize the antiquated aviation management system, according to a harshly critical inspector general’s report released Thursday.

It was the fourth inspector general’s critique in as many years of a program known as NextGen, on which more than $7 billion in federal funds has already been spent.

… The report said the FAA “has lacked effective management controls” in awarding contracts, sometimes spent money on low-priority projects and allocated an estimated $370 million for projects that were still awaiting approval.

… NextGen has long been a cause of consternation and frustration in Congress and with commercial airlines that are expected to invest billions of dollars in their own cash to complete the system.

NextGen is often described as a GPS-based system, but it is a vastly more complex network of interlocking systems that will change cockpit communications, guide airplanes both aloft and on the ground, and allow airlines to fly directly to their destinations rather than turning after reaching each designated way point.

… Together they will allow planes to safely fly closer to one another, save fuel and time, get immediate weather updates, and communicate more effectively with other airplanes and with air traffic controllers.

… But the cost of equipping each plane to handle the new systems has been estimated at $200,000. Airlines say they need reassurance that if they invest, the NextGen program will be delivered on schedule.

That led House Republicans, later with the support of President Trump, to propose that the NextGen program and more than 30,000 FAA workers be spun off into an independent, nonprofit corporation.

… There have been 13 confirmed or acting heads of the FAA since the precursor of NextGen was proposed as the Advanced Automation System in 1983.

… “FAA does not have today, and has not had since its inception, anything that would approximate a real plan for achieving a lot of the things it has advertised for the NextGen program,” said an FAA employee familiar with the program, who asked to remain anonymous to speak candidly. “I think the sentiment out there is that NextGen has been a big dud, and it’s hard to disagree with that sentiment if you look at what’s actually been produced.”

More on air traffic control reform here.




The Los Angeles Times reports on the latest setbacks to California’s high-speed passenger rail project. The project is far over budget and way behind schedule. Is anyone surprised?

Randal O’Toole describes the plague of cost overruns in government rail systems here, and he explains why high-speed passenger rail makes little sense here. I discuss the epidemic of cost overruns on government infrastructure projects here.

The LAT says:

The price of the California bullet train project jumped sharply Friday when the state rail authority announced that the cost of connecting Los Angeles to San Francisco would be $77.3 billion and could rise as high as $98.1 billion — an uptick of at least $13 billion from estimates two years ago.

The rail authority also said the earliest trains could operate on a partial system between San Francisco and Bakersfield would be 2029 — four years later than the previous projection. The full system would not begin operating until 2033.

… The new estimates will force California’s leadership to double down on its political and financial commitments if it wants to see the system completed, against a backdrop of rising costs, years of delays, strident litigation and backlashes in communities where homes, businesses, farms and environmental preserves will have to give up land to the rail’s right-of-way.

… The new business plan is based on a wide range of uncertainties, Kelly said. Among the most challenging is the cost of about 36 miles of tunnels through mountainous Southern California, which could range anywhere from $26 billion to $45 billion, according to the report.

… A spokesman for Gov. Jerry Brown, who since the 1980s has championed high-speed rail, said the disclosures do not change the strong support he expressed in his recent State of the State address, when he said: “I make no bones about it. I like trains and I like high-speed trains even better.”

… The disclosure about the higher costs comes nearly a decade after voters approved a $9-billion bond to build a bullet train system. The original idea was that the federal government would pay about a third of what was then an estimated $33-billion project, with private investors covering another third.

When project supporters are admitting that the cost “could be as high as” $98 billion, it obviously will be at least that high in the end. That would be triple the original promised cost, and ten times the amount that voters directly approved.

But Jerry likes trains, so full steam ahead!

Cass Sunstein has been for some time a capable and influential critic of individual choice and limited government. Over the past decade, he has argued that the Internet is failing liberal democracy. Left to their own preferences, he says, individuals choose to avoid political views that challenge their prior beliefs. They form filter bubbles that exclude contrary views and echo chambers that polarize debates. Both complicate solving national problems.

These alleged filter bubbles and echo chambers comprise expressing and hearing (or reading) speech, both highly protected activities in the United States (or in any polity deserving the name liberal). The harms of filter bubbles and echo chambers should be much more than alleged to justify government actions to “improve” our debates.

Sunstein’s claims about filter bubbles and echo chambers have a certain appeal. We can imagine people choosing to avoid unpleasant people and views. As communications researcher Cristian Vaccari notes:

social media users can make choices as to which sources they follow and engage with. Whether people use these choice affordances solely to flock to content reinforcing their political preferences and prejudices, filtering out or avoiding content that espouses other viewpoints, is, however, an empirical question—not a destiny inscribed in the way social media and their algorithms function.

Both older and more recent studies cast doubt on Sunstein’s claim that the individual choices of Internet users are turning the nation into a polarized dystopia. For example, several studies published in 2016 and earlier indicate that people using the internet and social media are not shielded from news contravening their prior beliefs or attitudes (see the references here). In 2014, experimental evidence led two scholars to state “that social media should be expected to increase users’ exposure to a variety of news and politically diverse information.” They conclude that “the odds of exposure to counterattitudinal information among partisans and political news among the disaffected strike us as substantially higher than interpersonal discussion or traditional media venues.” A 2015 paper based on a panel design found that “most social media users are embedded in ideologically diverse networks, and that exposure to political diversity has a positive effect on political moderation.” Contrary to the received wisdom, this data “provides evidence that social media usage reduces mass political polarization.” A broad literature review in 2016 found “no empirical evidence that warrants any strong worries about filter bubbles.” Just before the 2016 election, a survey of U.S. adults found that social media users perceive more political disagreement than non-users, that they perceive more of it on social media than in other media, and that news use on social media is positively associated with perceived disagreement on social media.

Did the 2016 election change these findings? No doubt all of the studies of that election have not yet appeared. But several suggest doubts about filter bubbles, polarization, and Internet use remain valid. Cato published a summary of a study by three economists who found that polarization has advanced most rapidly among demographic groups least likely to use the Internet for political news. The cause (Internet use) was absent from the effect of interest (increased polarization). Other studies have been more specific. Three communications scholars examined how people used Facebook news during the 2016 U.S. presidential campaign. They had panel data and thus could examine how Internet usage affected the attitudes of the same people over time. The results suggest Sunstein’s concerns are exaggerated. Both Internet use and the attitudes of the panel “remained relatively stable.” A filter bubble did not appear: the people who used Facebook for news were more likely to view news that both affirmed and contravened their prior beliefs. Indeed, over time, people exposed themselves more to contrary views which “was related to a modest…spiral of depolarization.” In contrast, they found no evidence of a filter bubble where exposure to news affirming prior attitudes led to greater polarization.

 Other recent studies have focused on both the United States and other developed nations or just European nations alone. Perhaps data and conclusions from other developed nations do not transfer to the United States. However, cultures and borders notwithstanding, citizens in developed nations are similar in wealth and education. Even if we put less weight on conclusions from Europe, such inform our thinking about supposed failures of Internet speech. 

In 2017, Cristian Vaccari surveyed citizens in France, Germany, and the United Kingdom to test the extent of filter bubbles online. He concluded “social media users are more likely to disagree than agree with the political contents they see on these platforms” and that “citizens are much more likely to encounter disagreeable views on social media than in face-to-face conversations.” His evaluation of Sunstein’s thesis merits quoting at length:

Ideological echo chambers and filter bubbles on social media are the exception, not the norm. Being the exception does not mean being non-existent, of course. Based on these estimates, between one in five and one in eight social media users report being in ideological echo chambers. However, most social media users experience a rather balanced combination of views they agree and disagree with. If anything, the clash of disagreeing opinions is more common on social media than ideological echo chambers.

Another recent study in the United Kingdom found that most people tended to avoid echo chambers. Only about 8 percent of their sample had constructed echo chambers. The authors urge us to look more broadly at media and public opinion: 

Whatever may be happening on any single social media platform, when we look at the entire media environment, there is little apparent echo chamber. People regularly encounter things that they disagree with. People check multiple sources. People try to confirm information using search. Possibly most important, people discover things that change their political opinions. Looking at the entire multi-media environment, we find little evidence of an echo chamber.

Finally, another study of multiple countries found that using social media was related to incidental exposure to news, contrary to Sunstein’s view that older media promoted such unintended exposure while new media do not.

Sunstein’s concerns about filter bubbles and echo chambers appear exaggerated. Accordingly, the case for government action to improve public deliberation fails.




Cato adjunct scholar Leland B. Yeager had a long career at the University of Virginia Department of Economics in its golden age and later at Auburn University. He is the author of Foreign Trade and U.S. Policy: The Case for Free International Trade (1976), International Monetary Relations: Theory, History and Policy (1976), and Free Trade: America’s Opportunity (1954). At 93 he is still as insightful and as blunt as ever, and he just published this critique of President Trump’s understanding of trade policy at Liberty magazine under the title “Profound and Destructive.” The whole thing is reprinted below.


President Trump’s destructiveness requires few words here. Consider how world stock and currency markets have been shaken by the resignation on March 6 of Gary Cohn, regarded until then as Trump’s chief economic adviser. Although not a trained economist, Cohn apparently had some sound instincts derived from years of financial experience. His departure apparently and ominously leaves more influence, or echo, to Peter Navarro — look him up with Google.

This latest example of destructiveness follows the one touched off by Trump’s March 2 tweet bewailing America’s loss of “many billions of dollars on trade with virtually every country it does business with” and heralding trade wars as “good, and easy to win.”

I’ll spend more words on how profound Trump’s ignorance is. He considers a country’s excess of imports over exports a measure of loss. This measure applies even to trade with each foreign country separately. He counts China and Mexico among the worst offenders, deserving punishment. He does not understand the multilateral aspect of beneficial trade.

Nor does he understand how we gain in buying goods cheap from abroad. What difference does it make if steel and aluminum are cheap because of low foreign prices or because they grow cheaply on bushes at home? Money cost is a measure of opportunity cost, which means the loss of other goods when resources go instead to make the particular good in question. Opportunity cost reflects scarcity. Scarcity applies even to prosperous America, where we could enjoy still higher standards of living if food, clothing, shelter, entertainment, and other goods and services came costlessly and miraculously from heaven. Scarcity and how gains from domestic and foreign trade alleviate it are fundamentals of economics. The principle of comparative advantage goes far in explaining how.

Without understanding the academic presentation of the “absorption approach to the balance of payments,” everyone should be able to grasp its central idea, which is sheer arithmetic. If we as a country use more output for consumption and real investment than we produce, then the difference must come from somewhere — from abroad in the form of more imports than exports. A big item in this excess absorption, alias national undersaving, is government deficits. Yet Trump and Congress are complacent about increasing the deficit and debt by taxing less and spending more.

All too many politicians say that they are in favor of free trade if it is “fair trade” played on a “level playing field.” These slogans express Trump’s view of international trade as a game, a zero-sum game in which one player’s gain is another’s loss.

Trump does not understand how the price system coordinates economic activity, making most government planning about jobs and industries unnecessary and harmful.

The profundity of Trump’s ignorance goes beyond economics. It extends to diplomacy in domestic and foreign relations and even to the behavior of a decent human being. Yet his destructive economic ignorance remains prominent.