Judging by the headlines, Ted Turner, who died earlier this month at age 87, will be remembered as an adventurer and visionary: creator of CNN, and with it the 24-hour news cycle, the inventor of the satellite-supported national TV superstation, a distinguished sailor, a generous conservationist, and a reputed playboy. He adored women so much that he produced five children with them, incidentally breaking faith with one of his core values: population control.  

When Turner was born on the eve of the Second World War, just over two billion people inhabited the earth. That number increased three-fold by 2000. For Turner, who had internalized the cataclysmic “overpopulation” fears of the Cold War, such growth in living, breathing souls was not a success, but a looming catastrophe. His goal was to first “stabilize the population,” then ideally reduce it to around two billion.  

Toward his vision of a world with fewer children, Turner was a generous donor to the United Nations Population Fund (UNFPA), Planned Parenthood, and the Guttmacher Institute. In 2004, the Planned Parenthood Federation of America presented him with the Margaret Sanger Award, which recognizes “leadership, excellence, and outstanding contributions to the reproductive health and rights movement.” 

Turner wasn’t the only billionaire philanthropist pouring money into population control. In 2009, he met privately in New York City with Bill Gates, David Rockefeller, George Soros, Warren Buffett, and others to discuss how they could use their wealth to curb overpopulation and fight climate change. They were known as the “Good Club,” The Guardian reported, and they wanted to “save the world.” 

Despite their anxieties about other people’s fecundity, the neo-Malthusian billionaires in attendance had, like Turner, been quite fruitful in their own reproductive behavior: Rockefeller had six children; Soros had five; and Gates and Buffett each had three. While sources described Gates as the “most impressive” speaker, Turner was the most outspoken and attempted to “dominate” the meeting.

His outspoken rhetoric certainly wasn’t limited to elite secret gatherings. At a climate luncheon in 2010, he urged world leaders to adopt China’s one-child policy, insisting that, “If we’re going to be here [as a species] 5,000 years from now, we’re not going to do it with seven billion people.” 

While lauded as an optimist, Turner believed humans were headed for a nightmare future unless they took drastic action against alleged overpopulation and climate change. He predicted a doomsday scenario of civilizational collapse, with famine, death, cannibalism, and very few survivors living in a “failed state like Somalia or Sudan.” The earth’s temperature is rising, he claimed, because “too many people are using too much stuff.”  

Meanwhile, as an adventurer, he afforded himself a lavish and abundant lifestyle, flying his Bombardier Challenger 300 private jet a distance of nearly 80,000 miles in 2022 alone. His aircraft that year surpassed the combined emissions of 34 average Americans.

Turner’s hypocritical and apocalyptic mindset reflected the zero-sum ideology of twentieth-century neo-Malthusians such as Stanford biologist Paul Ehrlich, co-author of the 1968 bestseller The Population Bomb, which boldly asserted that hundreds of millions of people would starve to death in the 1970s due to overpopulation. Turner admired Ehrlich and derived his two-billion world population ideal from Ehrlich’s estimation of earth’s “carrying capacity.”   

This outlook received bipartisan support in Washington throughout the 1960s and 1970s among “Rockefeller Republicans” like Gerald Ford and Henry Kissinger as well as environmentalist Democrats like Jimmy Carter. Neo-Malthusian ideas were institutionalized within the State Department and USAID, operating under the misguided assumption that rapid population growth inhibited economic development and constituted a threat to US national security and economic interests. Food aid was even conditioned on developing countries’ willingness to implement population control policies.  

The neo-Malthusian consensus wasn’t shattered until the Reagan administration declared rapid population growth a “neutral phenomenon” rather than a barrier to development at the UN’s 1984 World Population Conference in Mexico City. Economist Julian Simon, who argued that “the ultimate resource is people,” was instrumental in shaping the Reagan administration’s renewed approach to population policy.  

In 1990, Simon triumphed over Paul Ehrlich in a ten-year wager on the prices of five metals. Ehrlich, betting that population pressures would diminish resources and spike commodity prices, lost to Simon’s more optimistic view that human knowledge, innovation, and resource substitution would produce greater abundance and lower prices over time.  

Simon is no less correct today than he was in 1980 when his wager against Ehrlich began. The “time prices” of basic commodities — denoting the amount of time someone must work to earn enough money to purchase a given item — have continued to shrink, owing much to population growth and the expansion of the rule of law, property rights, and economic freedom.  

Contrary to the assumptions of Turner and the neo-Malthusians, population growth hasn’t exacerbated famine, poverty, and disease. Nor has it necessarily hastened global warming. As economists Dean Spears and Michael Geruso documented in their 2025 book After the Spike: Population, Progress, and the Case for People, no theoretical or historical relationship exists between population size and particulate air pollution. Whether the human population stabilizes or declines, global warming is forecast to proceed. “Billions of lives lived would make a small difference to this big problem,” they said.  

Addressing and overcoming challenges like climate change requires sustained technological progress, which is enabled by more free minds, not fewer. Turner wanted to limit both human numbers and human freedom, but his Malthusian views embodied a discredited consensus that applied a yeast-in-a-petri-dish model to the study of human population.  

This dismal perspective, which assumes people will breed themselves into oblivion, doesn’t take into account the better angels of our nature: our rationality, ingenuity, and adaptability unparalleled by any other species. But it reveals a lot about how Malthusians think about their fellow humans — not as sovereign individuals possessing inherent rights and dignity, but rather as an infestation requiring systemic control. As Julian Simon pointed out, this worldview isn’t predicated on scientific facts but on “value judgments about the worth of human life.”  

Simon’s intellectual archnemesis, Paul Ehrlich, preceded Turner in death by less than two months. These two Malthusian giants departed our resourceful earth at a time when roughly two-thirds of people live in countries with sub-replacement fertility rates, meaning the average woman is having fewer than 2.1 children. The depopulation they so fervently sought — and funded — has at last become a reality. 

But it comes at a price. Countries are not only facing spiraling debt and deficits spurred by population aging and worker shortages, but also a dearth of love, care, and support for the elderly. In countries like Japan, those who fulfilled Turner’s wish and had only one child — or perhaps none — are increasingly dying alone and undiscovered for days, weeks, or even months. It’s a sad and overlooked outcome of depopulation, but luckily for Turner, who suffered from Lewy body dementia, he had five children, along with billions of dollars, to support him in his final years of decline and dependency.

High school history curricula often portray feudalism as a quaint medieval relic — a cautionary archetype of concentrated power, conditional rights, and extractive hierarchies that suppressed human flourishing for centuries. As ever, though, the deeper lesson of history is its recurring nature: when property rights erode and rent-seeking supplants open competition, societies reliably drift back toward feudal arrangements. 

American medicine today offers a vivid illustration of this pattern, as government-created barriers sustain local monopolies, nonprofit hospital systems function as modern lords, and physicians relinquish professional autonomy in exchange for the illusory security of salaried fiefdoms. The result is contemporary serfs in white coats serving within tax-exempt citadels.

A Primer On Feudalism

In the medieval manor, a lord granted a vassal a fief — a plot of land — in exchange for loyalty, military service, and a share of the harvest. Serfs tilled the soil with little claim to its fruits. The system was rigid, hierarchical, and extractive. Today, a parallel structure has emerged in American healthcare, not through sword and oath but through certificates of need, Medicare payment rules, and tax-exempt status amidst the backdrop of massive mergers and acquisitions.

Non-profit hospital systems function as modern feudal lords. Physicians have become their vassals, granted small fiefdoms — department chairs, service-line leadership roles, or simply in employed practices — in return for allegiance to the system’s revenue machine. This is the neofeudalism of medicine, born out of crony capitalism and regulatory capture.

Feudalism’s formal titles — king, duke, baron, knight, vassal, serf — reflected a chain of reciprocal obligations rooted in land tenure. Lords owned the means of production; vassals administered justice and defense; serfs provided labor. The system endured for centuries because property rights were conditional and fragmented. Allodial title — true private ownership free of feudal dues — was rare. Markets were stifled. Innovation lagged. The decline of feudalism accelerated in the late Middle Ages and early modern period precisely because secure private property rights emerged. The rise of towns, the enclosure movement, and the commercialization of agriculture allowed individuals to own, improve, and trade land outright. Money economies replaced barter and service. The bourgeoisie accumulated capital. Centralized monarchies and later liberal states enforced contracts and reduced arbitrary exactions. As Douglass North and other institutional economists have shown, well-defined, transferable property rights unleashed entrepreneurship and growth. Serfdom withered not because of royal decree alone, but because free exchange proved more productive. Feudal ties dissolved when individuals could keep the full fruits of their labor.

Medicine’s Drift to Neo-Feudalism

Medicine once mirrored this liberalizing trend. Post-World War II, most physicians owned or partnered in independent practices. They controlled their schedules, negotiated directly with patients and insurers, and bore the risks and rewards of their craft. Private property in medical practice — autonomy over one’s office, staff, and patient relationships — fostered competition and innovation. That world is vanishing. Today, nearly 78 percent of US physicians are employees of hospitals, health systems, or corporate entities. Private practice has collapsed into a shrinking remnant.

The new lords are sprawling tax-exempt “non-profit” health systems. These entities enjoy at least $37 billion  annually in federal and state tax breaks — property, income, and sales tax exemptions — while operating with margins and executive compensation packages that rival for-profit corporations. Many run massive investment portfolios and for-profit subsidiaries. Their community-benefit spending often falls short of the value of their exemptions when measured rigorously; some profitable systems deliver minimal charity care relative to their tax windfall. 

Government policy supplies the moat around these castles. Rule after rule and regulation after regulation favors the big conglomerates. The regulatory reach adds to the lords’ dominion.

Certificate-of-need (CON) laws are still on the books in about 35 states plus DC, requiring regulatory approval before new hospitals, surgery centers, or even MRI machines can open. Incumbent systems predictably oppose competitors’ applications, turning state boards into tools of rent-seeking protection. Without CON, independent physicians and ambulatory centers could challenge hospital dominance. With it, local monopolies flourish.

Once entrenched, these systems wield two powerful economic weapons: the 340B Drug Pricing Program and site-of-service payment differentials. Enacted in 1992 to help safety-net providers serve low-income patients, 340B allows qualifying hospitals to purchase outpatient drugs at steep discounts — often 20-50 percent or more — then bill insurers or Medicare at full list price. In 2024, covered entities purchased $81.4 billion in 340B drugs. But studies and reports show the windfall frequently funds facility expansion, acquisitions, and executive pay rather than expanded charity care for the intended populations. Contract pharmacies amplify the arbitrage. The program has become a hidden tax on patients, employers, and manufacturers, with limited transparency on how savings reach the vulnerable.

Site-of-service differentials complete the trap. Medicare — and many commercial payers — reimburse the identical service at dramatically higher rates when performed in a hospital outpatient department (HOPD) instead of a physician’s independent office. A clinic visit, imaging study, or minor procedure in an HOPD can command 125 to 300 percent more reimbursement. Hospitals therefore acquire physician practices, rebrand them as HOPDs, and capture the facility-fee markup. Patients are sometimes seeing the same doctor in the same building but for twice as much.

Physicians are increasingly likely to be employed by these healthcare entities — not because they want to, but because the structure and rules are tilted that way.

The physician receives a salary or production bonus but loses ownership. The patient pays higher coinsurance. Independent practices cannot compete on price because the payment rules themselves favor the hospital flag. Vertical integration explodes. Horizontal mergers compound the effect. Markets once served by several competing hospitals see them consolidate into single dominant systems: one or two health systems control the entire market for inpatient care in half of American cities. Research consistently shows that such mergers raise prices five to 20 percent or more — with little or no improvement, and sometimes deterioration, in quality. Cross-market mergers demonstrate similar price effects after several years.

The physician-vassal’s daily reality reflects the bargain. A neurosurgeon or cardiologist may receive a competitive base salary, malpractice coverage, and administrative relief from his affiliation with a hospital. In return, the doctor must (directly or indirectly) refer patients only within the system, meet RVU targets that prioritize volume over value, and accept corporate dictates on electronic health records and formulary restrictions. They must accept care pathways optimized for margins, rather than patient outcomes. Dissent risks contract non-renewal, often triggering noncompete clauses. 

True entrepreneurship — opening an ambulatory surgery center or cash-pay spine clinic —  requires profound courage and near-inevitable litigation within the framework of CON. The independent doctor who once embodied the free professional has become a salaried cog in a revenue-extracting machine.

A Freer Alternative

Reversing neofeudalism in medicine demands restoring property rights and competition — the very forces that ended medieval feudalism. Policymakers should repeal CON laws nationwide, as several states already have with measurable price reductions and new market players. Implement full site-neutral Medicare payment for outpatient services, leveling the field so independent practices can survive. Reform 340B with transparency mandates, patient-definition tightening, and caps on windfall profits unrelated to charity care. Stop the unnecessary ban on physician-owned hospitals that provide better care at cheaper costs. Antitrust enforcement must scrutinize both horizontal and vertical mergers with renewed vigor. Tax-exempt status for hospitals should be performance-based, tied to verifiable charity care and community benefit exceeding the exemption’s dollar value.

Physicians are not serfs by nature; they are highly trained entrepreneurs stifled by regulation. Patients deserve choice, not tribute to the local castle. The same free market principles that dismantled feudalism can dismantle this one — if policymakers have the courage to let property rights and competition do their work. The alternative is a healthcare system where lords grow richer, vassals grow compliant, and everyone else pays the price.

When Henry Hazlitt wrote in Economics In One Lesson that “Economics is haunted by more fallacies than any other study known to man” he knew what he was talking about. Economic fallacies abound — and are even popular. What’s worse, economic illiteracy seems to only increase. In part, this is due to economists trying too hard to be scientific and help policymakers engineer the economy.

Many consider the well-known words of Lord Kelvin obvious, that “when you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind.” That sentiment has been taken to heart by many in the sciences, both natural and social, and also in economics. 

After all, without the ability and use of mathematics and statistical data analysis, science would not be able to contribute much knowledge at all. Yet there are limits to the usefulness of measures, as Goodhart’s Law suggests: “When a measure becomes a target, it ceases to be a good measure.”

It is actually even worse in economics, where the use of measures can arguably be a cause of widespread economic illiteracy.

An example of this is the frequent references to inflation in the business press. Experts eagerly note how anything from weakening demand to supply shocks and trade policy will change the inflation rate. The same can be claimed about economic growth, which apparently can not only be generated by economic policy but where government spending “causes” or is essential for economic growth — regardless of how the money is spent.

Both are examples of how economic understanding suffers from what Charles Goodhart recognizes. Inflation is real and so is economic growth, but both are economic concepts with real meaning. In order to investigate them, economists invented statistical constructs — the CPI and GDP, respectively — to simulate approximate measures of the concepts. But both are imperfect. 

Inflation used to be understood by economists as the general rise in prices due to the dilution of money. Hence Milton Friedman’s claim that “inflation is always and everywhere a monetary phenomenon.” Prices always fluctuate, but that is just the market’s price mechanism. Inflation was distinct: the effect on prices overall from meddling with money (basically, counterfeiting).

Economic growth explains the increase in the wealth of a nation, which economists understand as the productive capacity. When this capacity increases, the economy can more easily satisfy consumers’ wants. We are richer as a result. 

In both cases, the measures are fundamentally flawed but provide some insight into change over time. The CPI captures some of the general rise in prices, but looks at the outcome without recognizing the cause. This has misled people, experts and laymen alike, to believe that increasing prices means inflation. But rising prices can have many causes, often entirely normal upstream effects. A sad result of attempting to measure the outcome is that, for example, a war that affects production “creates inflation.” But higher oil prices are not inflation. This is something that no reasonable economist would have even considered, but now it is presented as a supposed “insight.” 

Similarly, the GDP gives an indication of an economy’s productive capacity, but also includes government spending on supposed public goods that are heavily subsidized or provided “for free.” In other words, it appears as if government spending, regardless of what the money is spent on, “creates growth” because it increases GDP. Such spending does not need to actually increase productive capacity — it can even harm productivity — yet still be interpreted as “economic growth” because of its effect on statistics.

Both are examples of how Goodhart’s Law applies — and in fact undermines our economic understanding. This is readily recognizable in how supposed experts claim that price ceilings, or any government effort to control prices (usually by prohibiting high prices), “fights inflation” or that government waste (by virtue of spending) “contributes to economic growth.” They focus entirely on the official statistic, which was originally a poor measurement of a well-understood economic concept, and anything that affects this statistic. But the understanding of the concept is all but lost. And, in fact, they run with it and in the process invent new economic fallacies in order to come across as insightful.

Economics thus remains haunted by fallacies. Rather than dispelling the fallacies or informing policy, some economic indicators and their analyses generate economic illiteracy.

When I was growing up, the only white-collar worker on either my father’s or mother’s side of our family was my Uncle Malcolm, husband of my mom’s older sister. He worked in the New Orleans office of the Maryland Casualty Company. I never quite knew just what Uncle Malcolm did, but because each day he wore to work a coat and tie, I was aware that his job differed greatly from those held by all the other men in my family, including my pipefitter father.

Sometime in the early 1970s, when I was 12 or 13 years old, amazing news swept through my family: Uncle Malcolm was going to fly to a business meeting in Baltimore. I’d never known anyone who flew commercially, so this development struck me as stupendous. And stupendous it was.

To see Uncle Malcolm off from the airport on his exotic journey were my parents, my three siblings and me, my maternal grandparents, and my Uncle Eddie with his wife and two daughters. An entire clan gathered at the airport just to watch Uncle Malcolm board the plane. (This was long before non-passengers were prohibited from going through security.)

I remember it well. It was a nighttime flight. I stood at the airport-terminal window looking out at the nose of the big jetliner that Uncle Malcolm had just boarded, envying him for doing something that I’d never done and had no reason to think that I would ever do. Standing next to me, gazing at the plane, was my Uncle Eddie. 

“I hope,” I told him without much real hope, “that one day I’ll get to fly in an airplane.”

“I bet you will one day,” Uncle Eddie replied kindly, although with how much sincerity I cannot say.

My First Flight

My dream came true early one morning in July of 1977 when two friends and I flew — each for the first time in our lives — from New Orleans to Washington, DC. We saved furiously for this vacation. I still remember that I was more excited about the prospect of actually flying in an airplane than about the time that my buddies and I were to spend in DC and, later in the trip, New York City. (Fun fact: We were in Manhattan for the 1977 blackout – a story for another day.)

Of course, we could afford only coach-class seats on our Delta Airlines 727 jet. But these seats were quite nice, and not only because we got to check our luggage for free. As soon as the plane reached cruising altitude, one of the stewardesses (as they were then called) came through with full meals for us. She draped a pristine and pressed white cloth across each of our tray tables before setting before each of us a large, delicious, three-course hot breakfast. She then offered us, without charge, mimosas. I’m still proud of — and not a little surprised by — the 19-year-old me for refraining from imbibing so early in the morning.

Even coach-class commercial aviation back then was pricey, but it was also — by today’s standards — luxurious. That luxury, alas, was testimony to the failure of government regulation of commercial aviation.

Regulating, then Deregulating, Commercial Aviation

Prior to deregulation that began in the late 1970s, interstate commercial air travel was governed by the 1938 Civil Aeronautics Act. With that legislation, the federal government restricted entry into the industry. It also established and assigned interstate routes, and regulated the fares that airlines charged passengers for seats on planes that flew those routes. This regulation was meant to ensure airline profitability and, thus, aimed to restrict competition among the airlines. On interstate routes, airlines could not compete for customers by lowering prices, which were set by the Civil Aeronautics Authority, later to become the Civil Aeronautics Board (CAB).

The airlines in the mid-20th century did indeed profit from the government’s regulatory efforts on their behalf. Nevertheless, even the government cannot prevent competition; its interventions can only divert competition into other channels that are less beneficial for consumers.

Unable to compete by lowering fares, airlines competed on the customer-service front. Compared to today, the standard coach seat during the era of regulation had more legroom. Full meals were common. As opposed to today’s use of the hub-and-spoke system, direct flights were the norm. (Although this costly feature was required by the regulators, it likely would have been commonplace even without being mandated.) And flight attendants were overwhelmingly young and attractive single women. Forced to pay high prices to fly, at least customers got something in return for the additional dollars the regulators obliged them to fork over for the privilege of flying.

Deregulation of fares allowed market experimentation to discover how better to serve airline passengers. Airfares fell dramatically, which seems necessarily to be an obvious benefit for consumers. But we know this fall in airfares to be a benefit to consumers only because it happened in a more-competitive market. Obviously, consumers would love to pay the lower fares while still having more legroom, more direct flights, and full meals with free booze in coach class served by attractive and charming flight attendants.

Competition Takes Place on Many Different Margins

These nice amenities aren’t free, however. They must be paid for. If the flying public had valued those regulation-era amenities enough to continue paying regulation-era airfares, airlines would have been happy to continue to supply those amenities at those high fares. But the public spoke with its purse: competition revealed that most air passengers prefer to pay lower prices, even if doing so means fewer amenities, than to pay higher prices in exchange for the many amenities. (The relatively few customers with different preferences choose to upgrade to seats in ‘economy plus’ or in first class.)

Flying today is much less costly, in real terms, than it was before airlines were deregulated. (And, by the way, deregulation did nothing to slow the improvement in airline safety.) As such, the commercial-aviation experience today — unlike when I was a boy and young man — is commonplace and hardly luxurious (adjusting for the reality that, nevertheless, when in an airplane you are flying through the air while seated in a chair, an experience that everyone before the twentieth century would have regarded as miraculous). Even for a working-class American family today, going to the airport simply to behold a relative boarding an airplane is as unimaginable as going to a local bus stop simply to behold that same relative boarding a bus.

Too Few Consumers Felt the Discount Spirit

It’s worth noting that competition also reveals the limits to consumers’ tolerance for sacrificing amenities for lower fares. Spirit Airlines’ business model was to eliminate as many as possible ‘free’ amenities, stripping the base ticket price down and charging separately for virtually everything else, including carry-on bags, seat selection, snacks, even water. Spirit also offered infamously little legroom.

Because ‘optimal’ market outcomes cannot be divined in the abstract — because these outcomes can only be discovered through competitive market processes in which entrepreneurs are free to experiment — it was a good idea to run this experiment. As it happens, though, too few consumers were willing to pay even low fares for that level of minimal amenities. Spirit was on the verge of bankruptcy well before the price of aviation fuel was sent soaring by the war in Iran, which is why JetBlue in 2022 offered to merge with Spirit – a move that would have enabled JetBlue to obtain Spirit’s equipment and landing slots.

In a monumental feat of economic ignorance, the Biden administration sued to block the merger on the grounds that it would reduce competition and raise fares. Spirit has now gone forever to the economic spirit world.

Bird’s Eye View

Here’s the view from 30,000 feet. When producers are allowed to compete on all margins, including price, they discover the optimal mix of prices and amenities that best satisfy their customers. When governments obstruct that competition, it gets redirected into changing the quality of goods and services such that the resulting price-quality mixes are less desirable than would be the mixes that emerge without government intervention.

After airlines were deregulated almost 50 years ago, consumers revealed that they wanted lower prices with less quality. And by more recently rejecting the bare service offered by Spirit Airlines, consumers revealed that quality can be so low that even very low prices are insufficient compensation to put up with such low quality. These results emerged from competitive market processes and deserve respect. But alas, just as airline regulation forced American air passengers to buy what they would have preferred not to buy, the government’s continuing itch to override market processes will oblige consumers in the future — whenever such interventions occur — to suffer worse economic outcomes.

Even great economists can make poor or incomplete arguments. George Stigler, a titan of the Chicago school alongside luminaries like Milton Friedman, Gary Becker, and half a dozen other Nobel Laureates, wrote an essay about what he saw as a surprising inconsistency in Adam Smith’s Wealth of Nations.

His article, “Smith’s Travels on the Ship of State,” makes the case that “The Wealth of Nations is a stupendous palace erected upon the granite of self-interest.” This seems uncontroversial, given Smith’s famous description of how the market harnesses self-interest to benefit society. People are “led by an invisible hand” to benefit their fellow man, even without plannning to. 

Indeed, markets create order through the signals and incentives created by prices, profit, and loss. Stigler praises Smith for his clear-eyed analysis of self-interested behavior in the market. Smith undeniably cast politicians, rulers, and the ‘man of system’ as self-interested actors.

Besides the profit-seeking of the butcher, the brewer, and the baker through voluntary exchange, Smith also recognized that business could (and would) seek profit through government protection, government subsidies, and government regulations. Smith famously said: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the publick, or in some contrivance to raise prices.”

Smith warned that governments tend to play a hand in this political profit-seeking – sometimes unintentionally. For example: 

A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a publick register, facilitates such assemblies. It connects individuals who might never otherwise be known to one another, and gives every man of the trade a direction where to find every other man of it.

But, Professor Stigler argues, Smith did not apply the assumption of self-interested behavior consistently: “Smith gave a larger role to emotion, prejudice, and ignorance in political life than he ever allowed in ordinary economic affairs.” Smith’s vision becomes clouded when he analyzes political actors and behaviors. And that’s a symptom of a deeper malady in Smith – his failure to rigorously and consistently apply self-interest in all human behavior:

“It is in the political arena that Smith implicitly locates the most numerous and consistent failures of self-interest in guiding people’s behavior, but this is not the only place where self-interest fails….Every failure of a person to make decisions which serve his self-interest may be interpreted as an error in logic: means have been chosen which are inappropriate to the person’s ends.”

Stigler argued there was no meaningful distinction between market behavior and political behavior: “no clear distinction can be drawn between commercial and political undertakings: the procuring of favorable legislation is a commercial undertaking.” This sounds similar to “Politics Without Romance,” in which James Buchanan argues for “symmetric” assumptions about people in politics and people in markets. We should not assume that people become more altruistic or less self-interested when they engage in political activity. But Buchanan makes this point:

“The public choice theorist should, of course, acknowledge that the strength and predictive power of the strict economic model of behaviour is somewhat mitigated as the shift is made from private market to collective choice. Persons in political roles may, indeed, act to a degree in terms of what they consider to be the general interest. Such acknowledgment does not, however, in any way imply that the basic explanatory model loses all of its predictive potential, or that ordinary incentives no longer matter.”

Such a point seems straightforward and modest, yet Stigler sees the world differently. Stigler contends that because political actors thrive on self-interest, exhorting them to altruism is a futile exercise. After all, one could not really lower the price of eggs by encouraging egg producers to lower their prices. Why bother asking politicians to ignore their constituents, snub their friends, or abandon the pet projects that secure their power?

“Why tell the sovereign that free trade is desirable, if one has no method of disarming the merchants and manufacturers who have obtained the protectionist measures….Why believe that better turnpikes await only the appointments of a better class of commissioners?”

And Stigler has a point. The experience of politics is not pretty. Public Choice economics elaborates the theory of special interests and collective action, and documents why political activity is best explained by self-interested behavior. When Smith encourages the sovereign to act in principled, rather than self-aggrandizing, ways, Stigler understandably asks, “how now Professor Smith?”

Smith was optimistic about the force of self-interested behavior leading to social benefit, and also correcting miscalculations and errors, because of competition given the incentives of profit and loss and the signals transmitted by prices. There’s a whole literature about the efficiency and inefficiency of political markets. Bryan Caplan’s Myth of the Rational Voter and Donald Wittman’s The Myth of Democratic Failure are two prime examples along with the public choice literature.

Hayek, however, claims that “the facts of the social sciences are what people think and feel.” So, is it possible to change what people find to be in their self-interest? I’m not referring to changing the material payoffs or benefits they receive, say through greater monetary or physical penalties, but to their valuing states of the world differently. In a famous article written with another Nobel Laureate (Gary Becker), Stigler rules such a question out of bounds for economists. After all, with tastes there is no arguing.

But there is an obvious distinction between politics and commercial arenas: prices! For our purposes, we don’t need to determine how efficient or inefficient political signals and competition are to recognize it does not have a market price system. Therefore, we should be more cautious about assuming that self-interested behavior will operate as efficiently and effectively as it does in private markets.

Stigler and Becker flatten the landscape of human motivation, treating our inner drives as static one-dimensional data points. While analytically clean, this approach eviscerates the complexity of human beings. This is not what Smith would (or did) do.

As a moral philosopher, Smith believed that people (whether in markets or in government) can and should be reasoned with. Our morals form through social interaction, and those morals then shape our behavior. Smith famously criticized Mandeville’s assertion that all human action is, by definition, self-interested and therefore inherently self-oriented and vice-ridden.

Smith correctly points out that the moral weight of our decisions does not rest on the existence of the self, but on what the self takes an interest in. And presumably human beings can choose their interests. Smith reasons accordingly, even if it seems like he fails to apply a narrow self-interest lens at times. But let me tell you from personal experience, not all commissioners are made equal. Smith would encourage us to exhort public officials to do well and hold their feet to the fire when necessary.

The legal foundation for taxing every import into the US has now rested, at various points in the past year, on a 1977 emergency powers law, a 1974 statute designed for a monetary system that no longer exists, and — if the administration’s next move is what trade lawyers expect — a Depression-era provision that has never once been used to impose actual tariffs in almost a century. At some point, running out of legal justifications is a signal worth heeding.

In February, the Supreme Court ruled that President Trump’s sweeping IEEPA tariffs were unlawful. The Court’s rebuke was clear: Congress had not clearly delegated that kind of sweeping tariff power to the executive branch, and the President “enjoys no inherent authority to impose tariffs during peacetime.”

Before the ink was even dry on that opinion, the White House signed Proclamation No. 11012 and imposed a new 10-percent tariff on basically every imported good. This time, the administration cited Section 122 of the Trade Act of 1974 and the so-called “balance-of-payments authority.”

In a 2–1 decision, the Court of International Trade struck that one down, too.

Section 122 and the Next Legal Fight

Section 122 of the Trade Act of 1974 was written for a monetary world that no longer exists. Prior to this statute, several foreign currencies were pegged to the dollar, and the dollar was, in turn, pegged to gold at $35 per ounce. This changed in 1971 when President Nixon severed the dollar’s link to gold and, in turn, hit the world with a 10 percent surcharge on imports. Congress, watching all of this happen in real time, wanted to give the president a narrow, carefully-defined emergency power to impose temporary tariffs when the US faced specific, identifiable, and measurable monetary crises.

The statute authorizes the President to act to deal with “larger and serious United States balance-of-payments deficits.” This phrase had a precise, technical meaning. Economists measured the balance of payments using three specific metrics: the liquidity balance, the official settlements balance, and the basic balance. Without going into too much detail, these tools were designed to track whether the US had enough gold and reserves given the dollar’s fixed exchange rate.

With a floating exchange rate system and fiat money, however, these measures are all but obsolete. The Bureau of Economic Analysis stopped reporting them in 1976, just two years after the Trade Act of 1974 (and with it, Section 122) was enacted.

Gleaning from the court’s ruling, the Trump administration argued that the “balance-of-payments deficit” is a living concept that should be updated for modern conditions. Today, they said, the correct measure is the current account deficit.

Courts Question the President’s Premise

The Court of International Trade was not convinced by this argument. The court reasoned that Congress used specific words that had specific meaning in 1974, and that their job is to interpret what those words meant when they were written, not to update their meaning in light of the world today. As the court put it, “the ‘balance of payments’ as an accounting principle always nets to zero. 

To the extent that is the case, if the President has the ability to select among the sub-accounts to identify a balance-of-payments deficit, unless every sub-account is balanced, the President would always be able to identify a balance-of-payments deficit.” In footnote 33, they go further, saying, “Defendants argue that ‘the balance-of-payments current account [is] the only reasonable measure of a balance-of-payment deficit.’ This argument lacks support in either the statute’s text or legislative history. Defendants’ position is the President has discretion to identify any actionable deficit for purposes of Section 122(a)(1). But Section 122 would lack an intelligible principle if the President could simply identify any deficit account, or if the phrase ‘balance-of-payments deficits’ could change with context.”

In other words, the court pointed out that if it accepted the government’s premise, any President could always point to a “deficit” somewhere and, on that basis, justify tariffs. In a system with an unconstrained imagination, that is no real limit on presidential power. As we have seen in recent years, courts have been increasingly reluctant to accept broad, open-ended delegations of Article II authority to the executive.

Why Most Plaintiffs Lost

The court’s ruling issued a permanent injunction — essentially an order to “stop it” — but it applies only to the actual importers who brought suit, not to every plaintiff in the case. Specifically, the injunction covers the State of Washington, which imported goods through the University of Washington, a small New York spice company called Burlap and Barrel, and a Florida toy company called Basic Fun.

The other plaintiffs were dismissed for lack of standing because they could not show they directly paid the tariffs, only that they might face higher costs as downstream purchasers. The court found that too speculative. Those claims were dismissed without prejudice, however, meaning the plaintiffs are free to refile if they can later establish proper standing.

The Latest Legal Theory: Section 338

The game of whack-a-mole that we have seen vis-à-vis tariff policy is certainly not going to stop. The Section 232 tariffs on products such as steel and aluminum remain in place and could still be expanded or modified, and the administration has already begun the process of implementing Section 301 tariffs. But there is another tariff authority that could be used as well: Section 338 of the Tariff Act of 1930.

This section gives the President the authority to impose tariffs of up to 50 percent on imports from any country that “discriminates” against US commerce. Unlike IEEPA and Section 122, this is an unambiguous statute that allows the president to do so. The very first line of the section reads, “the President when he finds that the public interest will be served shall by proclamation specify and declare new or additional duties as hereinafter provided.”

This as-yet-unused authority has three features that make it the likely next step in the tariff saga. First, it allows for tariff rates up to 50 percent. This is already higher than most of the IEEPA tariff rates that were imposed before they were struck down. Second, it only requires that the President “finds as a fact” that a foreign country is discriminating against US commerce, with no mandatory investigation, no notice-and-comment period, and no notification to Congress required. Third, it allows the President to issue a total ban on imported goods from a country that does not relent in response.

Given all of this, the obvious question is “why didn’t the President use this authority to begin with?” There are a few potential reasons. First, any tariff rates announced are not allowed to be implemented for a period of at least thirty days after the proclamation is issued. While the president famously issued extensions, pauses, and delays in rolling out several of the tariffs he announced throughout 2025, this thirty-day period does mean that the authority granted here is not as immediate as the President may have liked.

Second, the statute assigns the US International Trade Commission with the duty to “ascertain and at all times to be informed whether any of the discriminations against the commerce of the United States…are practiced by any country; and… to bring the matter to the attention of the President, together with recommendations.” Because of this, it’s not clear that the President can act unilaterally and at his discretion or if he needs some pro forma report from e.g. the US Trade Commission before he can act. Could he, for example, raise tariffs on Switzerland because he didn’t like the way their former president talked to him without US Trade Representative Jamieson Greer recommending that he do so? It’s unclear.

Finally, sweeping tariffs of the sort that the administration seems to prefer are legally difficult under Section 338. The statute requires that the tariffs be country-specific and must be designed to “offset” any damages done. This makes it harder to implement broad, sweeping tariffs, though, as we saw last summer, the White House is perfectly able to use mail-merge to send letters to numerous countries announcing new tariff rates, perhaps obviating this concern.

Which Will Run Out First — Courts’ Patience, or the President’s Claims to Authority?

The problem the President is going to run into is that he has now tried and failed to claim open-ended tariff authority twice. It is clear that courts are reading congressional delegations very carefully and very narrowly. If the President tries to use a Depression-era statute designed to address discrimination to reconstruct the IEEPA tariffs, he will almost certainly face a very skeptical bench. If it looks like IEEPA, walks like IEEPA, and sounds like IEEPA, we shouldn’t be surprised if the court treats it like IEEPA.

A recent Wall Street Journal report on a workplace trend called “tokenmaxxing” offers a revealing glimpse into some of the confusion attending America’s AI boom.

Some companies, the Journal reports, are experimenting with measuring an employee’s engagement with AI by tracking “tokens”—the units into which the system converts text typed into prompts. Now, in some workplaces, it seems token consumption has become a badge of an AI user’s engagement, experimentation, or productivity.

This is a striking moment. During what often feels like a national celebration—or national heart attack—over the transformative productive potential of artificial intelligence, we are publicly debating if an employee’s value might be measured by the volume of text sent to and from a chatbot.

The controversy deserves more attention than its odd jargon suggests. It exposes a central uncertainty in the AI revolution: what, exactly, does productive use of AI mean?

Reporting in Built-In, Ellen Glover reports that tokenmaxxing “is taking much of the tech industry by storm… individuals are ranked on leaderboards based on how much they use AI, with generous perks and incentives encouraging them to push these tools to their limits… The assumption is that the more you use AI, the more productive you must be. Those who lean in the hardest will come out on top.”

She adds that some employees take advantage of the fact that now “systems use AI agents to work autonomously for hours on end, reviewing and editing large codebases and writing entire programs while their human users are out living their lives.”

Tokens are real enough. Large language models do not “read” language as humans do. They convert words, punctuation, fragments of words, and other text elements into tokens—standardized units processed mathematically. The more tokens used, generally, the more computing resources consumed. AI providers often charge by token volume. Tokens therefore matter to engineers, accountants, and software managers.

When tokens migrate from a technical unit used in billing into a measure of employee performance, however, we risk confusing the cost of computation with the creation of value.

Admittedly, that equation would not be new. Management history is full of attempts to measure what is easy to measure rather than what is important. There are blunt historic examples: the British government in Delhi put a bounty on dead cobras, enterprising Indians bred cobras to kill for the bounty. During the Vietnam War, strategy said the goal is “winning the hearts and minds of villagers,” but the “body count” became the actual metric. Closer to the topic at hand, IBM in the 1980s began to measure productivity by lines-of-code-written (“source lines of code” or SLOC). The example has become a classic in the field: the incentives favored programmers who wrote long, inefficient code to meet their quotas. A programmer who could nail a complex problem with five elegant lines of code was measured “unproductive.”

Now we seem to be testing the equation: prompts sent = value created.

The temptation is understandable. Measuring real productivity in knowledge work has always been difficult. If a machinist produces 50 precision parts in a shift and another produces 20, comparison is at least possible. But how does one compare two analysts, marketers, editors, researchers, lawyers, or managers?

One employee may produce fewer memos but better decisions. Another may write more pages but create confusion. One may solve a crisis with a ten-minute insight. Another may consume three days generating activity. In modern office work, the most valuable contributions are often invisible until later.

Artificial intelligence does not eliminate this problem and may indeed intensify it.

Suppose one employee uses AI constantly—drafting emails, summarizing calls, rewriting notes, brainstorming slogans, asking endless follow-up questions, generating presentation decks, and polishing language. Another uses AI sparingly but strategically—clarifying a difficult concept, checking a spreadsheet formula, testing objections to a proposal, accelerating a first draft, then applying judgment and revision. Tokenmaxxing makes the question sound rhetorical: Which employee is more productive? But the answer is not obvious.

Heavy AI usage can reflect creativity and initiative. It can also reflect confusion, dependency, indecision, poor training, performative busyness, or simple fascination with a new tool. Light AI usage can reflect resistance and stagnation. It can also reflect mastery, efficiency, and independent competence.

A few independent researchers, including the code-analysis site Jellyfish, have rushed to study the efficacy of tokenmaxxing. Their initial conclusions are limited but telling. In an April 15, 2026, article, Nicholas Arcoland, Ph.D., reported that “We analyzed 12,000 developers across 200 companies in Q1 of this year. What we found is that while more tokens do correlate with more output, they come at a dramatically higher price point per unit…

“At a high level, token usage varies wildly across developers.

“The typical user (50th percentile) consumes about 51 million tokens per month on AI coding. Meanwhile, the 90th percentile user consumes more than seven times that amount, at roughly 380 million tokens per month. A relatively small group of power users is driving a disproportionate share of total token consumption….

“What do you get for all those tokens?

“…higher token usage does lead to more output, but not proportionally. The cost per merged PR increases from just $0.28 in the lowest usage tier to $89.32 in the highest.

“More tokens means more output, but at a much higher price per unit.”

Metrics tend to have appeal because they relieve managers of judgment. A leaderboard of token usage appears objective; numbers can be ranked. Executives can announce measurable progress in AI adoption. Thus, the issue is made objective but apparent objectivity is not actual understanding.

Deep gains in productivity often are achieved not by doing more tasks faster, but doing the right tasks, avoiding the wrong tasks, framing problems correctly, and making better decisions. An AI system may generate five possible marketing campaigns in seconds. It still takes judgment to decide if any fit the brand, the market, the budget, or the moment. AI can summarize 10 reports. It still takes conceptual clarity to know what matters in them. AI can produce a polished memo. It still takes responsibility to decide whether or not the memo should be sent.

A 2025 McKinsey & Company report, “What Is Productivity,” pointed out that an astonishingly small group of firms contribute to the lion’s share of productivity growth (fewer than 100 out of 8,300 in three countries accounted for two-thirds during the period studied). They all made one or more of five strategic moves: 1. Scaling more productive business models or technologies. 2. Shifting regional and product portfolios toward the most productive businesses. 3. Reshaping customer value propositions to increase revenue and value added. 4. Building scale and network effects. 5. Transforming operations to raise labor efficiency and reduce external cost at scale.

Yes, broadly stated those achievements point to decisions at the executive level. At the same time, however, the rarity of success suggests a top-down emphasis by those executives on human agency: the capacity to choose goals, prioritize means, recognize context, exercise responsibility, and direct tools toward purposeful ends. They make the difference between activity and achievement. AI can assist agency, serve as its tool; but at least for now cannot replace the need for it.

And the consequences go well beyond the issue of tokenmaxxing. Much of the public rhetoric around AI assumes that productivity rises automatically as machine usage rises. Add more AI, and output climbs. Replace more workers, and efficiency follows.

History offers reasons for caution.

When spreadsheets became common, the best executives were not those who opened the most spreadsheets. When search engines arrived, the best researchers were not those who ran the most searches. When calculators spread, the best mathematicians were not those who pressed the most buttons. Because our tools amplify our ability when guided by ability.

So with AI. The worker who asks sharper questions, spots errors quickly, knows when to distrust outputs, understands the customer, grasps the larger objective, and accepts responsibility for results may create more value with modest AI use than another worker who generates oceans of machine text.

Thus companies adopting the token-use metric may be measuring the wrong thing in their very first phase of adopting AI. Better might be to ask harder questions: did project cycle times improve? Customer satisfaction rise? Revenue per employee increase?

Innovations such as tokenmaxxing to measure programmer productivity are the lifeblood of firms in a free economy, of course. This example deserves special scrutiny only as an indicator of strategies under consideration by the explosively growing, fiercely competitive, and internationally important AI sector.

Such innovations in a vibrant American market economy are tested by the standard of profitability, so tokenmaxxing ultimately will be measured by its competitive advantage in advancing the overall productivity of the U.S. economy. Here is the decisive advantage of the United States in the much-touted AI competition. In a recent article in The Daily Economy, I looked at the People’s Republic of China’s bid for international hegemony, including in AI. 

In the end, decisions about advancing AI are political in China. It is a warning to the United States to reckon the costs of yielding development of AI to regulations and dictates. The recent confrontation between Anthropic and the Pentagon over Anthropic’s “guardrails” for the use of AI goes to the heart of the issue.

It is the free-market economy that has delivered the incomparable progress of artificial intelligence, with all its protean potential. It is an advantage America cannot afford to squander. 

Socialists often criticize US trade restrictions on Cuba. A recent example is the flotilla organized by activists attempting to deliver aid to the island that aimed to draw attention to the embargo. Participants and commentators often frame Cuba’s poverty as a direct result of US policy: lift the embargo, the argument goes, and Cuba will prosper.

What should we make of this argument? For one, the primary driver of Cuba’s persistent poverty is the Cuban government’s own economic policies, including state control, chronic misallocation, and long-standing restrictions on private enterprise. These institutional mistakes would keep Cuba poor even without the embargo.

That said, there’s little doubt that trade barriers cause economic harm, and socialists are right to recognize this. But here one might wonder: can socialists coherently object to trade restrictions while also opposing free market capitalism more broadly?

Many think the answer is yes. The socialist target isn’t free exchange as such, but private ownership of productive property. Socialists object to an economy where capitalists own the means of production and workers sell their labor for wages or a salary. Socialism, by contrast, would create a kind of “workplace democracy,” where firms are owned and operated by workers themselves. They’d collectively make decisions about production, investment, and distribution rather than take orders from a single boss. This could mean workers directly voting on major business decisions or periodically electing managers to act on their behalf. Suppose, for example, that a worker-owned pizzeria is deciding whether to shift from traditional pizza to a more upscale artisanal menu. In a traditional capitalist firm, the owner would have the final say. In workplace democracy, the cooks, servers, and other employees would collectively decide how to proceed. While there might be some conflicts between growth and equality, writes Mike Beggs at Jacobin, such a model would aim to “harmonize firm-level democracy with macroeconomic expansion and a solidaristic wage.”

Under this style of socialism, markets would still play an important role. Central planners wouldn’t decide how to allocate resources to the pizzeria or determine how many pizzas it has to bake. Instead, the pizzeria would compete with rival restaurants for customers just as it would under capitalism. The goal is to retain the information markets provide in the form of prices, profits, and losses while “socializing” ownership of firms.

At first glance, it seems as though this version of socialism is perfectly compatible with free trade. You could have an economy in which firms are democratically owned and still allow free trade both within and across borders.

That’s fine as far as it goes. But there’s a tension lurking in the background. Consider that a central justification for free trade is that it enables all parties to voluntarily enter into an economic agreement in the expectation of mutual benefit. As Adam Smith puts the point:

Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of.

If I want the apples you have, and you want the oranges I have, we’re both better off as a result of a trade. Trade barriers — tariffs, quotas, embargoes, and the like — block these sorts of exchanges. That’s why critics of the Cuba embargo argue that it makes people worse off: it prevents them from engaging in mutually beneficial exchange, which an abundance of research shows is a source of human prosperity.

Once you see trade in this light, it becomes harder to draw a bright line between the kinds of exchanges socialists want to allow and the kinds they want to prohibit. As I mentioned earlier, to qualify as socialist, an economy must not permit capitalists to own the means of production and hire wage laborers. This means that a socialist economy must prohibit freely agreed-upon, mutually beneficial capitalist labor agreements. For instance, suppose Barry doesn’t want to take on the risks and responsibilities that come with being a co-owner of a coffee shop; he’d rather work for a steady wage as a barista for a corporate giant. Nevertheless, a socialist economy wouldn’t allow him to do so. (Otherwise, it would start drifting toward capitalism.)

It’s not clear why trading barista labor for money is all that different from trading apples for oranges. In both cases, people are making voluntary agreements in the expectation that they’ll be better off as a result. Here, then, is the tension. On the one hand, socialists criticize trade restrictions on the grounds that they block mutually beneficial exchange and thereby make people worse off. On the other hand, they want to restrict or eliminate capitalist employment of wage laborers — even when workers voluntarily choose those arrangements.

So something has to give. You can’t easily say, “Let people trade as they see fit because they expect it to benefit them,” while also saying, “But don’t let them sell their labor as they see fit, even when they expect it to benefit them.” 

If mutual benefit justifies freely trading apples for oranges, it’s hard to see why it doesn’t also justify freely trading labor for wages. And if workers may trade their labor freely, they may trade it to capitalists — a conclusion that socialist defenders of free trade are sure to find unwelcome.