Proponents of laws banning so-called hate speech often couch their arguments in terms of dignity: that is, they claim that banning hate speech is essential for protecting the dignity of minorities from racial slurs and other denigration. As David Shih writes for NPR, hate speech is “nothing more than state-sanctioned injury of people of color.”

This argument sounds plausible; but in actuality, free speech is the best friend of minorities. In his book Kindly Inquisitors, gay activist Jonathan Rauch documents the brutal conditions under which gays and lesbians lived in the United States in the 1960s.

Gay Americans were forbidden to work for the government; forbidden to obtain security clearances; forbidden to serve in the military. They were arrested for making love, even in their own homes; beaten and killed on the streets; entrapped and arrested by the police for sport; fired from their jobs.

What helped gay men and women to change the culture of the United States such that they could begin to live lives of dignity and grace? Free speech. As Rauch writes,

In ones and twos at first, then in streams and eventually cascades, gays talked. They argued. They explained. They showed. They confronted. … As gay people stepped forward, liberal science engaged. The old anti-gay dogmas came under critical scrutiny as never before.

Rauch documents how gays and lesbians fought for their rights and their dignity, and how that fight slowly bore fruit in building a culture that respected both. Free speech is one of the best tools that disempowered people have to push the culture at large to respect their innate human dignity.

But I want to flip the dignity argument around on would-be censors like Shih even further. The truth is that if we’re really serious about respecting the dignity of every human being, then we need a culture of free speech.

One reason is that every human being has unique experiences, which lead to a unique perspective. None of us have lived the exact same life as someone else, which means that all of us have a unique outlook on life that cannot be fully captured by anyone else. Each of us can add our own beautiful note to the grand symphony of the human experience.

When we censor people, we degrade their perspective. We tell them that their note isn’t worth adding to the symphony, that the rest of us can get along just fine without the unique knowledge and perspective that only they can contribute. That’s an incredibly insulting way to think about our fellow human.

This is especially true because, contra the myth of many of those who would ban so-called hate speech, the people who would suffer under these laws aren’t just people who want to use racial slurs and denigrate others. Hate speech laws are invariably broad, which means they’re going to punish a lot of speech that might have value. For instance, feminists in England have been charged with hate speech because they insist that there are biological differences between men and women. In the United States, a graffiti artist in Brooklyn was charged with hate speech for spraypainting messages such as “a wrongful arrest is a crime” that criticized the NYPD.

And even if so-called hate speech truly did have no value, laws banning it still have to be enforced. That enforcement presents its own concerns. When a government throws a young man in prison for posting a meme on social media that the government doesn’t like, can we really say that his dignity is being respected? No matter the noble impulse of some censors, there’s something barbaric about how this censorship looks in practice.

This is even true when the censorship isn’t being performed by the government, but by private citizens forming cancellation mobs. Like official bans on hate speech, cancel culture has often been defended as being about dignity: a way of calling out the powerful and giving a voice to the powerless. But it rarely looks this way. In practice this kind of cultural censorship looks like ordinary peoples’ lives being destroyed, often for jokes or for statements that are misinterpreted by the cancelers. One man was fired from his job for having just moved to New York and not knowing what a bodega was. The video he made airing his frustration was deemed racist by the online mob, but he disagrees. Rather than making fun of the minorities who run bodegas, he says, “It was more of an intent to almost like make fun of myself for being a new person in the city.” When we make snap decisions to destroy a person’s livelihood based on a single video clip without first trying to understand the context or intent of that clip, are we really respecting the other person’s dignity?

In fact, joining online mobs to culturally censor someone is often less about making the world a safer and kinder place for minorities, and more about indulging our own human capacity for cruelty. Former canceler Barrett Wilson describes his “gleeful savagery” in tearing apart other peoples’ lives for minor misdeeds. He regrets the “destruction and human suffering,” that he and other cancelers caused, suffering that they often had to selectively forget in order to maintain the myth in their own minds that they were the good guys.

Authoritarianism — including the urge to censor — can be linked to some pretty nasty psychological traits. As social psychologist Bob Altemeyer notes, authoritarians “strongly believe in punishment, and admit that they derive personal pleasure from administering it to ‘wrongdoers’.”  (Altemeyer was studying right-wing authoritarians, but his insights apply to authoritarians across the political spectrum).

It can be tempting to look at the racial slurs and other insults that some minorities have to deal with and conclude that bans on hate speech are essential to respecting our human dignity. But the truth is the opposite. If we truly want to build a society that respects the dignity of every human being, then we have to start by affirming the right to speak.

Tariffs are the talk of the town. The Trump administration is advocating for tariffs on just about everything and everyone, employing various justifications — they will bring back manufacturing jobs, help us combat China, and improve US national security — to sell them to the public. The national security argument is popular among foreign policy and national security experts, but the way it is often framed is flawed, which leads to erroneous policy conclusions.

Supporters of tariffs and similar policies that curb trade to improve national security argue that citizens who engage in foreign trade do not adequately consider the impact trade has on the national security community’s foreign policy goals. From the foreign policy perspective, if tariffs help secure the nation e.g., make it easier for foreign policy officials to negotiate national security agreements, then tariffs should be part of trade policy even if they hinder the economic choices of individual citizens. In this view, the desire of individuals to trade with the lowest-cost provider of a good or service is only one consideration, and often it is of secondary importance to the security goals of the nation.

One example of this view is the idea of the ‘national security externality’. As the economist and former Member of the European Parliament Luis Garicano describes it:

The national security externality exists because private actors do not account for how their decisions affect their government’s bargaining power through resilience to conflict. When a US company imports cheap Chinese chips and builds infrastructure dependent on them, it creates a strategic vulnerability — a cost not reflected in market prices.

In this framing, private citizens impose an externality on government actors, whose bargaining power is reduced by the actions of private actors pursuing their goals while ignoring non-market costs. Because of this market failure, government officials are justified in imposing some restrictions or taxes (tariffs) on the international economic activity of citizens.

This framing is wrong. Externalities only exist if two parties with different objectives can impose costs (or benefits) on each other in ways that are not captured by relevant prices. In America, government exists to protect the rights of individuals, and government officials should have no interests or objectives of their own, separate from the citizens who empower them, that can be impacted by externalities.

As stated in the Declaration of Independence, it is the government’s duty to protect the rights of individuals. This includes the right to engage in commerce, including commerce with foreigners. In fact, one of the grievances that motivated the Declaration was “For cutting off our Trade with all parts of the world.”  If international trade makes obtaining a given level of national security more expensive, the government can communicate this to the citizenry and request more resources to properly conduct its charge. The externality framing, however, makes it seem as if the goals of the government and citizens are of separate but equal concern.

If instead the government is viewed as a means for protecting the rights of citizens, with no objectives of its own, then all the costs of national security can be internalized. Citizens, through the democratic process, then choose the proper level of national security and trade considering these costs. Tariffs may have a role to play in the solution, but they should be compared to other remedies such as direct taxation, and only if citizens concede that national security is in fact being underprovided.

A non-tariff example may help illustrate this point. Suppose someone mows my lawn for $50 per week. Now, my son has taken up an interest in croquet, and the hoops in the yard make the mower’s job more difficult. In response, the mower tells me he must increase his price by $25 per week to compensate him for the extra time it takes to navigate my yard with the hoops in place. This extra cost is not an externality. There is only one set of preferences here, mine, and the cost my child’s hobby imposes on the mower can be internalized by the price the mower charges. Similarly, if my preference to trade with international producers imposes a cost on the US national security apparatus charged with maintaining a given level of security, they can communicate this to me and charge me more in taxes. Alternatively, I may decide to pay the same in taxes and accept less national security. Similarly, I could keep paying the mower $50 and accept a worse lawn-care experience.

In short, there is no government with its own goals separate from its citizens on which citizens can impose an externality. There are only citizens who make choices that can increase or decrease the cost of providing for their national security. Constrained by these costs, citizens must determine the most effective way to protect their shared interests from belligerent actors.

Government officials are not a separate interest group that can just assume a national security market failure and then take unilateral action to correct it since the citizens may in fact be maximizing their welfare subject to a resource constraint. In economic jargon, there is only one production possibilities frontier and one national objective function, and it is through the democratic process that we decide where to lie on that frontier.

The North American Free Trade Agreement (NAFTA) between the United States, Mexico, and Canada harkens back to a not-so-distant past when Congress took its constitutional role “to regulate Commerce with foreign Nations” seriously. 

In his final weeks in office, Republican President George H. W. Bush signed the agreement on December 17, 1992. The House and Senate approved NAFTA less than a year later in a bipartisan fashion with Democrat President Bill Clinton signing the Implementation Act in December 1993. 

Just over 31 years since, NAFTA and its updated USMCA have proven a boon to the American economy. 

The agreement slashed many tariffs immediately upon enactment in 1994. By 2008, nearly all import duties between the three nations had disappeared. Central to the agreement was manufacturing freedom. But NAFTA also removed unfair trade barriers placed on service industries — including banking, insurance, and telecommunications. Guaranteeing fair treatment for foreign investors also spurred cross-border investment. This included protecting their property from expropriation and providing international arbitration in lieu of oft-biased local courts. Patents, copyrights, and trademarks also received protection from piracy and counterfeits to an extent unprecedented in trade deals. Cross-border commerce soon soared. The US, Canada, and Mexico benefited greatly from lower costs, more investment, and streamlined trade.  

As NAFTA pried open markets by limiting quotas and other non-tariff barriers, trade transformed and blossomed. Since 1994, American exports have nearly tripled, even after you adjust for inflation.  American goods exported exceeded $2 trillion last year. Exports from the US to Mexico jumped from about $40 billion a year to an all-time high of $334 billion in 2024. Our exports to Canada more than tripled, rising from $100 billion to a near all-time high of $349 billion last year. Both of America’s NAFTA partners import more than twice as much from the US as China — number three on the list.

No agreement is perfect, of course. Some sectors, notably dairy, received cronyist carveouts. But contrary to popular belief, American exporters enjoyed a manufacturing renaissance. 

The US agricultural sector saw a major boost from NAFTA. With tariffs on many farm goods eliminated, exports to Canada and Mexico soared. Corn exports to Mexico jumped from negligible levels to billions of dollars annually, while soybean, pork, and beef shipments also climbed. In 2023, Mexico and Canada accounted for more than 32 percent of US agricultural exports — over $55 billion a year in sales. Farmers in Iowa, Ohio, Nebraska, and Texas literally reap the rewards of this expanded market access. 

The auto sector thrived under NAFTA’s integrated supply chains. Tariffs on vehicles and parts dropped to zero, letting companies like Ford, GM, and Chrysler source components from Mexico and Canada at lower costs. This kept US-made cars competitive globally — exports of vehicles to Mexico alone grew from under $1 billion in 1993 to nearly $29 billion in 2024. Plants in Michigan, Ohio, and the Midwest benefited from this cross-border efficiency, even as some assembly shifted south. The American automotive sector exports more than $160 billion annually, nearly doubling in inflation-adjusted terms since 1994. Across the nation, American factories churn out automobiles for export — including BMW’s South Carolina plant which employs 11,000 Americans. Motor vehicles are among the top three exports in 14 states, including Missouri, Michigan, Ohio, and Tennessee.  

Beyond autos, manufacturing broadly gained from cheaper inputs and bigger markets. Machinery, electronics, and chemicals saw export booms — US machinery exports to NAFTA partners tripled in value post-1994. Firms in industrial hubs like Illinois and Pennsylvania found new customers, while lower-cost Mexican imports (like steel or plastic components) trimmed production costs, helping manufacturers stay lean in a global race. America’s aerospace industry now exports nearly $100 billion a year.  

The energy sector, particularly oil and gas, benefited as well. Much of the record levels of US-produced oil is sent to Canada for refining before returning to fuel our vehicles. Meanwhile, Canada became the US’s top supplier of some types of crude oil needs. Although the United States produces more oil on net than we consume, petroleum types and uses vary. For this reason, we imported nearly 4 million barrels a day from Canada in 2023 representing 97 percent of their oil exports. Mexico sends refined products north to us as well. The boom in American natural gas production helps supply the energy needs of all three nations — all without tariff taxation. More than half of our natural gas exports flow to Canada and Mexico, 8 percent of our total production. This keeps energy prices stable, directly supports extraction and pipeline jobs in Texas, North Dakota, and elsewhere. Industrial electricity prices — essential to competitive manufacturing — benefit as well. 

Retailers and consumer goods companies — like Walmart or food processors — benefit from cheaper imports and a larger export market. American families enjoy Mexican fruits and vegetables — in the middle of winter — at affordable prices. American brands like Coca-Cola, Kraft, and John Deere profit by more sales in Mexico.  

Deeper ties with Canada and Mexico drove efficiency, created jobs, and increased output. Of course — some industries like textiles and furniture faced tough competition. It’s a misnomer to claim manufacturing has been “hollowed out.” In fact, the United States is a bigger manufacturing powerhouse today than 30 years ago. Industrial output increased by more than half since 1994 — and is near all-time high today.

At the same time, fewer people are employed in manufacturing despite the increased output because efficiency has surged. Our economy has shifted to much higher-paying, advanced services. In fact, we now export far more of these services than we import. In other words, free trade has allowed us to purchase low-cost products from overseas, focusing on these new high-paying sectors where we enjoy a comparative advantage. 

The services sector — including finance, logistics, and tech — expanded under NAFTA. US banks and insurers gained easier access to Canadian and Mexican markets, while cross-border trucking and shipping grew to handle booming physical trade. American service exports to NAFTA partners topped $128 billion in 2023, boosting well-paying white-collar jobs.  

Of course, protectionists bemoan the fact that our imports from our partners grew by even more. But a trade deficit is identical to our capital surplus that flows back to the United States often in the form of foreign direct investment (FDI) in businesses here. Since NAFTA’s enactment, FDI exploded more than 500 percent to more than $330 billion annually. This helped spur a doubling in overall worker productivity in the past 40 years. Competition forces producers to innovate. As efficiency grew, GDP across all three nations grew.  

It’s not just investors or managers who benefit from rising productivity. Workers share in this abundance of affordable, available, and diverse goods. American families are far better off. Thanks largely to the innovation and efficiencies from free trade, millions of Americans enjoy new opportunities in well-paying professions. Middle-class real annual family income increased more than $28,000 since 1994. By 1980s income standards, middle-class shrank as a share of the population only because millions of these families are now earning what would have been upper middle-class incomes. Yes, that’s in real, inflation-adjusted terms. Meanwhile, a greater percentage of prime-working age adults are employed today than pre-NAFTA. 

NAFTA exhibits how widely shared abundance materializes when governments meddle less and let markets work.  Trade barriers — tariffs, quotas, and restrictions on investment — distort prices, prop up inefficient producers, and rob consumers of choice. 

Tearing down these barriers between the US, Canada, and Mexico generated widespread abundance. Free trade certainly means lower prices for businesses and families. Who wants to pay a Canadian lumber tariff when building a home — or a Mexican tequila tax? But, just as importantly, free trade means the liberty to buy and sell without seeking the approval of or paying off the central planners in Washington, DC.

The Federal Reserve’s monetary policy committee left the target range for its policy rate unchanged at 4.25 to 4.50 percent at its May 7 meeting, maintaining the level set in December 2024. Although tariffs have added to economic uncertainty, market participants widely expected the Fed to hold rates steady.

At the post-meeting press conference, Fed Chair Jerome Powell said the committee continues to view the US economy as solid, despite rising uncertainty. He noted that unemployment remains low and the labor market is at or near maximum employment. But he also cautioned that the risks of both higher unemployment and elevated inflation have increased.

Powell explained that the Administration’s trade policies prompted businesses to front-load imports in anticipation of potential tariffs, causing an unusual swing in net exports that complicated first-quarter GDP measurement. Nevertheless, he highlighted that private domestic final purchases — which exclude net exports, inventory investment, and government spending — grew at a solid 3 percent pace. But he also warned of a sharp decline in business and consumer sentiment, which could dampen spending later this year.

Wage growth has moderated to what Powell described as a more sustainable trajectory that continues to outpace inflation. On prices, he noted that both headline and core inflation remain above the Fed’s 2-percent target. Market– and survey-based measures suggest that households and businesses expect tariffs to push inflation higher in the near term. But Powell emphasized that long-term inflation expectations remain anchored at the Fed’s 2-percent goal.

Powell also pointed to substantial changes in trade, immigration, fiscal, and regulatory policy under the Trump Administration, noting that their effects remain uncertain as the specific policies are still evolving. He assured listeners that the committee will continue to monitor these developments closely and adjust monetary policy as needed to fulfill its mandate of price stability and maximum employment.

Powell warned that, if the Administration follows through with its announced tariffs, inflation will likely rise, economic growth will fall, and unemployment will increase. He was careful to point out, however, that the inflationary effects could prove temporary if the tariffs result in only a one-time upward shift in the price level. That said, he acknowledged that the inflationary impact could persist if it takes longer for the tariffs’ effects to pass through fully into prices.

Powell reiterated that the committee is obligated to keep long-run inflation expectations anchored at 2 percent and to prevent one-time price level increases from developing into an ongoing inflation problem. Fulfilling this obligation could require placing greater weight on the price-stability side of the Fed’s mandate, he said, noting that sustained price stability is essential for sustaining strong labor markets.

Finally, Powell cautioned that the Administration’s policies could create tension between the Fed’s dual mandate of price stability and maximum employment. If that happens, Powell explained, the committee would assess how far inflation and unemployment are from their respective goals and how long it might take for those gaps to close, adjusting policy as needed. For the time being, however, Powell said the committee believes a wait-and-see approach is best until uncertainty surrounding the Administration’s policies decreases.

Every year, Oxfam publishes its report on world inequality. The statistic is always the same: a very small number of insanely wealthy individuals own most of the world’s wealth. The 2025 edition is no different. The titles and claims are no different: “billionaire wealth surges”; “top 5 ways billionaires are bad for the economy”; “Billionaires’ fortunes are growing at an unimaginable pace” etc. 

Nothing is different from the first time I engaged with it in French, my native language, a decade ago. It’s always meant as a criticism of markets, capitalism, neoliberalism or whatever label is in vogue at the time. No different also because it continues to eschew one major criticism – leaving all the other (more technical ones) aside – regarding “missing wealth.” 

What missing wealth? That of the world’s poor! 

For residents of Western countries, it is easy to imagine being able to prove that a house belongs to us or that a business is ours. All the assets we own are easily recognized. But this reality does not apply everywhere on Earth. In fact, countries with strong recognition of property rights are more the exception than the rule. Indeed, the worldwide norm is a weak protection of property rights as rulers prefer to be able to seize properties if need be or regulate their uses for the purposes of preserving political power. 

When individuals cannot have their ownership recognized, their wealth officially does not exist — even though it very much does. In 2000, economist Hernando De Soto studied what he called “dead capital.” The term refers to resources privately owned by individuals but without any formal title of ownership. 

For example, a Peruvian citizen might own a small business, but legally that property does not exist. Without legal recognition, it is extremely difficult to make that capital grow. On one hand, this hampers economic growth. On the other hand, it means we vastly underestimate the wealth (read: capital stock) of the world’s poorest populations. In 2000, when De Soto produced the first estimate of the scale of this “dead” (i.e., inactive) capital, the total amounted to about $9.3 trillion (9,300,000,000,000 dollars). At the time, this amounted to approximately 28 percent of global individual income. Assuming that proportion holds today, mobilizing this stock of dead capital at a 5 percent annual return (a highly conservative estimate) would generate an additional $1.49 trillion in output per year—equivalent to roughly 1.4 percent of current world GDP.

This may not seem like much. But there are three reasons why it matters a lot. First, the gains would accrue primarily to those at the very bottom of the global income distribution. If all the extra income went to people in Latin America, the Middle East (minus Saudi Arabia, Qatar, United Arab Emirates and Israel) and Africa, this would amount to around $580 per head. In these regions, incomes per head fluctuate from between $500 to $17,000. For them, such an income boost would be significant. Second, the resulting income boost would raise the baseline from which these economies grow—meaning that even if growth rates remain unchanged, the absolute gains compound more quickly year after year. Third, if part of this capital is channeled into research and innovation, it could permanently increase the growth rate itself. Taken together, these effects could help close the gap between rich and poor countries almost overnight, while also accelerating the pace at which that gap narrows over time.

Unfortunately, De Soto’s calculation has never been updated or expanded, but the problem is widely acknowledged among development economists. When some claim that global wealth disparities are gigantic and growing, they are usually referring only to financial wealth — which does not include this mountain of unusable capital due to lack of legal recognition. Thus, the poorest segments of the world’s population actually hold much more wealth than is commonly believed. 

Remember, the reason why dead capital exists in the first place is because property rights are poorly protected in many nations. Because of the insecurity of property rights, owners cannot easily prove ownership. This limits the ability to use de facto assets as collateral or to sell them. It also discourages any investments into existing properties since the fruits thereof cannot be appropriated. It also limits the ability to rent a property to other parties (and as a result, property is more often rented to kin at a discount rather than to the highest bidder). Broadly, the consequence is that these assets stay in the informal economy where they are not used at their full potential. 

By preventing the poorest individuals from leveraging the resources they already own, we severely limit the growth potential of developing countries. Moreover, by sending the message that it is not worthwhile to have their existing capital recognized and protected, we also discourage the creation of new capital.  

One recent paper, concerned with China’s economic growth, studied a case of property rights reform and confirmed that there was significant amounts of “dead capital” waiting to be unleashed for productive uses. In 2007, China adopted the Property Law, which granted private property the same legal status as public property (a big deal in Communist China). The result was that new private firms emerged and grew in size as their production increased rapidly. This was because they marshalled “dead capital” into highly productive uses—something clearly visible in the rapid rise in output from private firms.

The example of China clearly illustrates the importance of the protection of property rights in bringing “dead capital” back to life. The corollary here is that the inequality that Oxfam bemoans does not justify its contempt for “markets” or “capitalism”. 

Rather, it justifies its embrace. Legalizing “dead capital” would lead to an acceleration of economic growth in countries where there is more of it. These countries are all poor countries. Embracing the true foundation of a well-functioning market economy – the protection of property rights – would help cure the ill that Oxfam complains about.

Supporters of tariffs claim that mainstream economists don’t understand the game. This “game” has been described by Peter Navarro as three-dimensional chess. I want to take that claim at face value, break down its dimensions, and then evaluate whether Trump’s actions are likely to lead to his desired outcomes. And the answer is “no,” because the administration is playing three quite different, inconsistent games all at once. That isn’t a strategy at all; rather, it’s a scheme for certain failure.

Trump and his advisers claim that their policies have three justifications. For simplicity, I will call these (1) security, (2) reciprocity, and (3) revenue. I’ll present these (as the lawyers put it) arguendo, meaning that for the sake of argument, we will just consider the case for Trump’s actions, and mostly put aside the counterarguments.

Security: First, national security requires securing supply chains, reducing US dependence on other nations. The main concern is China, but any such dependency weakens our strategic position. In this view, the US is vulnerable not only to holdup of essential items such as advanced semiconductor chips, but more generally to the hollowing out of our national capacity to produce large ships and other manufactured products. Since modern manufacturing is shut down by any missing component, many parts are shipped to the US from abroad — this exposure to the whim of foreign leaders or the fragility of shipping and fast delivery is an unacceptable risk.

Of course, ending the offshoring of supply chains is wrenching, and developing domestic sources will be terribly expensive. But national security is always expensive: if these dependencies are the main American security vulnerabilities, as has been argued by Jon Pelson or the House Homeland Security Committee, then the expense will be worth it. If it’s true that “trade is bad,” then high, permanent tariffs and other trade barriers are essential to national security.

Reciprocity: Second, the goal might be to reset world trade by encouraging consumers in other nations to buy more American products. On this view, the US has been played for a fool for decades, having (relatively) open markets for foreign imports but not requiring reciprocal openness in our trading partners. It’s time to stop losing: foreign nations need the US market more than we need theirs.

If the US raises tariffs on imports, other countries will be forced to lower their barriers to our products. Everyone understands that this strategy is costly in the short-run, because tariffs disrupt existing patterns of business and raise costs for consumers. But these short-run costs will quickly be recovered, as US exporters will have greater opportunities to sell American products abroad on a level playing field.

Revenue: Third, the administration has touted tariffs as a (nearly) free revenue source, under the claim that these taxes are paid primarily by the foreigners who want to move their products through US customs. Taking that claim at face value (even though it is nonsense) requires that tariffs be low and permanent. After all, there is a tariff “Laffer Curve” just like for income taxes: a zero rate produces zero revenue, and at some high rate revenue also falls to zero.

The revenue rationale is sometimes based on the claim that the nineteenth-century US budget was (almost) entirely funded by tariff revenue, meaning that the income tax can be eliminated. Alternatively, the new revenue could be used to reduce the burgeoning fiscal deficit, or the government could declare a “tariff dividend,” returning the money to taxpayers as a windfall paid by foreigners.

The Contradiction: Pick a Dimension

The argument for free trade is that nations, and the people who comprise them, face thousands of complex “make or buy” decisions. The rule for a nation, just as for a family or a business, is that if something is cheaper to buy than it is to make, then it is better to specialize in making only those things we can make best and cheapest, and buy everything else. If other countries have barriers to their consumers buying our products, that’s their problem; the argument for free trade is unilateral, meaning that only the “make or buy” comparison is relevant. Artificial price increases that result from trade barriers distort this comparison, so that the US ends up making things that it could have purchased more cheaply from another nation.

I have outlined the three main counterclaims to this general rule of “make or buy”: security, reciprocity, and revenue. The way the arguments were presented assumed that each, while not perfect, had some merit. (I do not myself think that is true, but it is useful in each case to grant the premise arguendo, as a way of understanding the claim.) 

The problem for Trump supporters is that even if one grants that each argument has some merits on its own, the three together are an incoherent and highly destructive muddle. 

The security argument implies, and in fact requires, that the US must permanently set up industries to make things that it could buy more cheaply on international markets. In particular, tariffs need to be high and fixed forever to block the import of foreign semiconductors, ships, and whatever else security demands. Only if there is a credible commitment to permanent confiscatory tariffs will domestic industries invest in the capacity to make these products, since by definition other countries can make them more cheaply than we can.

Fair enough, but then high tariffs cannot be used as a bargaining chip in reciprocal negotiations, and tariffs cannot be low enough to earn revenue. After all, the only way tariffs produce revenue is if they are low enough as to not discourage substantial imports, and that is the opposite of the stated goals. The security argument requires no imports, no negotiated tariff reductions, and no revenue, because trade itself is the danger. The security argument, if it is correct, rules out the reciprocity argument and the revenue argument.

The reciprocity argument requires that the tariffs are temporary, and that the commercial bargaining strength of the US — based on the unmatched size of our consumer market — will force other nations to lower trade barriers against US goods. That view is largely nonsense, because (just as in the US) the political benefits of tariffs are valuable to concentrated interests in countries that maintain tariffs against us. If other countries cared about their consumers, they wouldn’t have tariffs in the first place. What that means is that other countries are likely to raise, not lower, their tariffs in response to “Liberation Day.”

But ignoring that problem still means that US tariffs would have to be very high (ruling out revenue) but temporary (ruling out security). The whole point of reciprocity is that the barriers won’t last. Temporary reciprocity tariffs cannot spur domestic investment or change our supply chain sourcing.

Finally, the revenue argument requires that there is little change in the volume of trade. Low, across the board tariffs would be necessary to avoid the substitution of products from adversary nations such as China to neutral countries such as India or the nations of Southeast Asia. Since the only way to make money from tariffs is to have them low enough as to not to discourage imports, the security argument is entirely precluded, and no domestic producers will invest in US capacity.

The reciprocity argument is likewise contradicted, since reciprocity claims tariffs are temporary, but revenue requires that they are permanent. The high tariffs required for reciprocity bargaining now, and the low tariffs after reciprocal agreements in the future, will produce relatively little revenue.

The bottom line is that whatever you think about the merits of each of the three “games” — security, reciprocity, revenue — moves that might work in one game are disastrous in the other two. 

By pretending to be playing all three games at once, the administration has ensured that we will lose them all.

My son says “College is bullshit” — and he’s only 10 years old — my physician told me. The boy had already decided he would not go, and his father, an Ivy League graduate with a prestigious specialty practice, was uncertain how to respond. He said to me, tentatively: “​Okay, he has to graduate from high school, but then…Well, he has to do something, but not necessarily college.” I could hear the bewilderment in his voice. 

The young man’s sentiment is crudely expressed, but it captures a spreading sense of rebellion, an undercurrent of disillusionment. As the cost of college skyrockets, students and families wonder if the promise of higher education is still being kept. And with many graduates underemployed or burdened with debt, or both, they have reason to ask.​ 

Public opinion polls seem to affirm this. A 2023 Gallup poll found that only 41 percent of US adults believed a college degree is “very important” — down from 70 percent in 2013. Among 18–29 year-olds, that number was even lower. And a 2022 ECMC Group survey of teens (ages 14–18) reportedly found that only 48 percent said they were likely to pursue a four-year degree, down from 71 percent in 2020.  And 42 percent believed success could be achieved through alternative pathways, including apprenticeships, bootcamps, or starting their own business. 

What has happened, my doctor was asking. Why is the price sticker for college so shocking, today? Sure, he said, I can afford it, but what does it deliver? 

More College  ≠ More Education 

In 1940, only 4.6 percent of Americans had a college degree. College was for the elite, those who could pay and a few fortunate scholarship winners. After World War II, the GI Bill enabled large numbers of working-class Americans to enter college. Mass higher education became political policy and a social expectation.​ 

By 2020, four out of ten Americans had a college degree of some kind. Community colleges, private universities, public universities, liberal arts colleges, institutes and academies, and for-profit institutions were serving a vastly wider demand. For decades, a rapid democratization unfolded and was greeted as a national achievement and strength. As of the 2023–24 academic year, according to the National Center for Education Statistics, the United States had 2,691 four-year degree-granting institutions. There were 1,496 two-year institutions, including community colleges and junior colleges primarily granting associate degrees and certificates. 

But even as it became the default path for men and women alike, college became increasingly administratively bloated, unabashedly ideological with confusing options of increasingly less value after college, and, for many, shockingly expensive. 

“Between 1993 and 2009, administrative positions at colleges and universities grew by 60 percent, a rate ten times faster than that of tenured faculty positions.” Today, many universities employ more administrators than professors. Student affairs officers, DEI coordinators, wellness directors, marketing teams, and “engagement specialists” now populate campuses. Few directly contribute to teaching or learning.​ The Harvard Crimson reported in “Fire Them All;  God Will Know His Own,” that Harvard employs 7,024 full-time administrators, a number closely matching its undergraduate population. 

Top colleges compete not just in academics but in amenities: gourmet dining halls, lazy rivers, climbing walls, luxury dorms. It’s common for new campus buildings to cost $500–700 per square foot. These upgrades appeal to prospective students, but they bloat the budget.​ In addition, colleges spend heavily on name branding, rankings manipulation, and student recruitment — none of which lowers costs. 

The Demographic Earthquake 

And beneath many colleges there is a demographic earthquake threatening. Too few applicants. Between 2010 and 2021, the number of US undergraduates dropped by nearly 15 percent. The birthrate decline after 2008 means fewer high-school graduates are entering the college pipeline. By the fall of 2025, the so-called “enrollment cliff” will hit many regions hard — especially the Midwest and Northeast.​ 

Simple economics: supply (college classroom seats) is outpacing demand. This surplus is especially pronounced among small private colleges and second-tier universities. Many now compete for the same students — not with lower list prices, but with luxurious amenities and aggressive tuition discounting.​ In 2023, the average tuition discount rate at private colleges reached 56 percent. That means for every $50,000 sticker price, the average student paid about $22,000.​ 

Does this help? Well, it enables schools to practice price discrimination — charging wealthier families more while offering discounts to others. But this distortion creates the illusion that college is even more unaffordable than it often is.​ 

The “Bennett Hypothesis,” advanced by former Department of Education Secretary William Bennett in the 1980s, is that federal aid fuels tuition inflation. Between 2000 and 2020, student loan debt ballooned from $240 billion to $1.6 trillion. In 2023 alone, the US federal government disbursed $112 billion in direct student aid, including Pell Grants and federal student loans. State and local governments added another $110 billion in direct support to public colleges.​ 

This government cornucopia has enabled colleges and universities to hugely “bulk up” their bureaucracies, charge much higher tuition and other costs to facilitate their “redistribution of wealth” from richer families to poorer (most “minority”) families, and direct a lot of alumni and other private contributions to appealing amenities. 

Revolution: The Core Curriculum 

There is another species of inflation. When college was rare, graduates were an elite. Today, they are the norm. Employers now require degrees for roles once filled by people with a high-school diploma.​ About half of recent college grads are underemployed or working jobs that don’t require a degree — baristas, retail clerks, or customer service reps. 

The ideological agenda of higher education has resulted in conversion of much of the core curriculum to postmodernist ideology, loosely termed “political correctness” and Neo-Marxism. Liberal arts programs have been shedding classical disciplines — logic, rhetoric, moral philosophy, history — for courses focused on identity politics, power structures, and postmodernist/Marxist critiques of Western (especially American) history, economies (that is, capitalism), society, politics, and the arts. While there are admittedly jobs for well-trained, committed cadres of postmodernist activism, the classes offer no preparation for most real jobs. How many staff writers does the Atlantic or the New Yorker need, after all? A graduate fluent in the works of the French Communist Party founder of “postmodernism,” Jacques Derrida, may not be fluent in Excel. 

As Professor Stephen Hicks, author of the modern classic Explaining Postmodernism: Skepticism and Socialism from Rousseau to Foucault, summarizes it: “Postmodernism became the leading intellectual movement in the late 20th century. It has replaced modernism, the philosophy of the Enlightenment. For modernism’s principles of objective reality, reason, and individualism, it has substituted its precepts of relative feeling, social construction, and groupism. This substitution has now spread to major cultural institutions such as education, journalism, and the law, where it manifests itself as race and gender politics, advocacy journalism, political correctness, multiculturalism, and the rejection of science and technology.” 

Heather Mac Donald, senior fellow at the Manhattan Institute, accuses universities of abandoning their core educational mission to peddle ideological orthodoxy. “The university has become an engine of identity politics, obsessed with race, gender, and oppression, rather than with the pursuit of truth.” How may soaring costs be related to ideology? She writes that “…federal money that goes into student loans is driving a huge part of the tuition increases and those in turn keep the bureaucracy growing. And Title IX has led to the creation of completely unnecessary offices in every university….I think that this is fundamentally an ideological issue and that the bureaucracy merely follows. This is driven by something much deeper, which is a hatred for Western civilization….The ‘real world’ now features the same insane search for its own racism and sexism.” 

Likewise, Thomas Sowell, senior fellow at the Hoover Institution, has long argued and adduced evidence that too many people in academia today are not educating students to think for themselves, but indoctrinating them with politically correct dogmas. “There are no institutions in America where free speech is more severely restricted than in our politically correct colleges and universities, dominated by liberals…” 

Both scholars say preaching ideology has sapped both the intellectual rigor of a classical education and the real-world value of a liberal arts degree — at least for employers prioritizing competence over left activism. Tech, healthcare, logistics, finance, and skilled trades are where job growth lies. And they require actual skills — data analysis, coding, medical certification, and supply chain expertise. 

Too many liberal arts grads lack quantitative competence and practical experience. Not all degrees are created equal. Science, technology, engineering, and mathematics (STEM) fields with majors such as accounting, mechanical engineering, cybersecurity, laboratory technician, nursing, and software developer have among the highest job placement rates, often 90 percent-plus within six months of graduation. Liberal arts, humanities, and most social sciences trail far behind. 

Schools And Degrees That May Work for Work 

As for practical experience, institutions with strong co-op programs or industry ties — Northeastern, Purdue, or Georgia Tech for three examples almost at random — can often place students into jobs more reliably than more prestigious but less career-oriented universities. Thus internships, mentorships, project portfolios, and networking matter more than ever but are relegated to extracurricular activities, not the core curriculum. 

There is no dearth of statements and studies making this point. Just one, a study by American Student Assistance (ASA) and Jobs for the Future, reported that 81 percent of employers prioritize skills over degrees when evaluating candidates. Additionally, 72 percent of employers believe a degree isn’t a reliable indicator of a candidate’s quality. That study is cited by a technology publication with a vested interest in special training versus degrees, but the sentiment is to be seen everywhere. A June 9, 2023, Bloomberg headline ran “LinkedIn Bets on Skills Over Degrees as Future Labor Market Currency.” 

Not surprisingly, we get statistics like this from a 2022 report from the Georgetown University Center on Education and the Workforce: Engineering, Computer Science, and Health Professions majors had some of the highest return on investment (ROI), with lifetime earnings exceeding $3 million in some fields. By contrast, majors in the Arts, Education, and Psychology often resulted in lifetime earnings under $2 million. A bachelor’s degree in Petroleum Engineering had the highest median ROI, with graduates earning more than $120,000 per year. A degree in Liberal Arts or Visual Arts often correlated with median earnings below $40,000 per year in the early career phase. 

How useful? Probably also true, in broad strokes, in 18th century Paris. Artists on the Left Bank versus engineers in Napoleon’s armed forces. Yes, it invites satire. But today, the liberal arts have been systematically degraded by ideological indoctrination. 

And finally, there is something that most of us sense in our daily lives. The Bureau of Labor Statistics (BLS) reports that many skilled trade careers that require two years or less of training, — electricians, HVAC technicians, and dental hygienists — lead to median salaries of $50,000–$80,000, often without debt. Many of these majors can be pursued at community colleges, where, according to the American Association of Community Colleges, almost 40 percent of US undergraduates get their higher education. Often, these are programs that combine certifications, hands-on apprenticeships, and industry partnerships — not college degrees — but lead directly to employment in such fields as healthcare, information technology, and skilled manufacturing. 

Costs, Opportunity and Otherwise

Back to my physician’s son: his rejection of college reflects a new cynicism among Gen Z. Perhaps they’ve watched their siblings and cousins graduate with debt, move home, and work menial jobs. Or been watching viral TikToks about “useless” degrees. Few perhaps could say why college is not what it once was, but their intuition is not wrong. For many, it has become a high-stakes gamble, not an investment. 

Parents and students scouting colleges have a few moves available that do not cut to the core of the problem, but ameliorate it. For example, region matters. Tuition tends to be lower at public universities in the South and West, higher in the Northeast. In the deep South, excluding Florida, colleges and universities have maintained more traditional curricula and lower-cost models, foregoing big research establishments and international prestige. There are reports, of course, of Florida and Texas actively pushing back against postmodernist, politically correct ideology, promoting technical skills, and being transparent about costs. And, as an all-too-reliable generalization, institutions in California and the Northeast tend to emphasize diversity initiatives — and charge higher tuition to sustain larger bureaucracies. 

So college can still be worth it and a degree still correlates with higher lifetime earnings. But your major, the institution, and career planning count for a lot. A BS degree in Nursing from a state university? A BA degree in Gender Studies from a small private college with no job placement services? Those are two scarcely comparable discussions of a college education. There are popular questions and formulas that families are urged to apply: What is the college’s job placement rate by major? What is the average debt load for graduates? The actual net price after all aid? How much emphasis is put on internships and other career preparation? 

“Financed by Businessmen” 

Arguably, the only force that might make colleges rethink their role — making a renewed and consistent commitment to admission on merit, intellectual rigor, marketable skills, and education of future professionals instead of ideological cadres — is private philanthropy’s boycott, the beginnings of which we saw when students at elite colleges demonstrated en masse for Hamas and against Israel after October 7. 

As long as Harvard can count on 30,000 alumni gifts a year, and gifts as large as $400 million (in 2015 from hedge fund CEO John Paulson), the administration and the status quo are fortified. The rethinking begins when Leon Cooperman, a 1967 graduate in business from Columbia University, now a billionaire hedge fund manager who contributed $25 million to support the construction of the Manhattanville campus, declares in an interview on Fox News he will no longer contribute to Columbia after the massive demonstration of Students for Justice in Palestine and a recent rise in antisemitism. 

“I think these kids at the colleges have sh*t for brains,” Cooperman said, when asked about the demonstration and similar ones at Harvard, Stanford, NYU, and many other colleges across the country. “I have no idea what these young kids are doing.”

“The real shame is I’ve given to Columbia probably about $50 million over many years,” Cooperman added. “And I’m going to suspend my giving. I’ll give my giving to other organizations.” 

Call it “activism” by  “capital” or “businessmen,” because that is what it is. It has been an extraordinarily long time in coming. As usual, Ayn Rand put it in unequivocal terms: 

The sources and centers of today’s philosophical corruption are the universities… It is the businessmen’s money that supports American universities — not merely in the form of taxes and government handouts, but much worse: in the form of voluntary, private contributions, donations, endowments, etc.

All I can say is only that millions and millions and millions of dollars are being donated to universities by big business enterprises every year, and that the donors have no idea of what their money is being spent on or whom it is supporting. What is certain is only the fact that some of the worst anti-business, anti-capitalism propaganda has been financed by businessmen in such projects.