Will AI Cause Unemployment?


Jeffrey Miron

This article appeared on Substack on November 3, 2023.

The Biden administration recently issued an executive order regulating artificial intelligence. This partially reflects fear that AI will cause mass unemployment.

Such concern, however, is only the latest instance of misplaced fears surrounding technological change.

Speculation that technology would make humans redundant dates to Aristotle, who mused that laborers could be made obsolete by sufficiently complex tools.

During the Industrial Revolution, such fears were infamously revived as protestors (the Luddites) smashed textile machines to resist being displaced. Economist Thomas Mortimer opposed such machines because they would “exclude the labour of thousands of the human race, who are usefully employed.” Many weaving jobs disappeared, but new jobs arose in their place.

In 1964, a group of scientists warned President Lyndon Johnson that computers would soon cause mass unemployment. Such predictions have been replete over the last several decades in response to almost every form of novel technology.

A decade ago, for example, an Oxford study estimated that 47% of US jobs were subject to automation over the next two decades. A decade into the prediction, the employment‐​to‐​population ratio is higher than it was when the paper was released.

Today, some claim that “this time is different” and that AI will permanently reduce employment. But the lesson from centuries of incorrect predictions about technological unemployment is that demand for human labor will continue.

While new technologies will certainly destroy some jobs, money saved from automation will be spent in other sectors. The number of jobs may even rise as new, previously unthinkable roles result from tech advancements, such as social media managers or cybersecurity specialists.

Instead of trying to slow technology, policymakers should allow AI to destroy some jobs even while it creates many more.

Don’t Expand the Border Wall. Instead, Fix Existing Policies That Increase Immigration


Jeffrey Miron

This article appeared on Substack on November 2, 2023.

The Biden administration recently announced its intention to expand the border wall between Mexico and the United States; the goal is to limit illegal immigration. This effort will fail.

The US‐​Mexico border is nearly 2,000 miles long with a terrain that makes a barrier across the whole distance nearly impossible. Even with a complete wall, constant surveillance is necessary to prevent migrants from going over or under the barrier, or utilizing other avenues like boat crossings to California or the Gulf Coast. Another avenue is visa overstays, which are a bigger source of illegal immigration than border crossings. Immigration bans, like those of drugs or guns, mainly fail.

The US has only two options for meaningfully reducing illegal immigration. Legalizing more immigration is the obvious response, even to the extent of open borders. This is the only long‐​term solution, since the demand for migration will persist so long as wages remain substantially lower in poorer countries, and so long as violence, corruption, and political chaos permeate many such countries.

The complementary approach is to reduce the demand to migrate, via policies that make sense irrespective of immigration.

One example is trade liberalization. Despite “free trade” agreements between the US and Latin America, the region still suffers from significant US‐​imposed barriers. The US should abandon these, including ending the sanctions that contribute to Venezuela’s bleak economic situation, which stimulates emigration. Similarly, the US should normalize trade relations with Cuba. Freer trade will boost the demand for labor in foreign countries and reduce international wage disparities.

The second key policy change is abandoning the war on drugs, which would allow other countries to scale back their prohibitions, thereby reducing the violence and corruption the drug war creates. Prohibition‐​induced turmoil in these countries is one reason for their immigrant outflows.

Most people want to stay where they live rather than make a long and dangerous trek to a different country, so the United States does not have to make other countries perfect. The US can, however, stop making them worse, and in ways that benefit the United States. This is far better than a border wall.

Is Tort Reform the Way to Constrain Healthcare Costs?


Jeffrey Miron

This article appeared on Substack on October 13, 2023.

The Wall Street Journal recently praised Nikki Haley for advocating healthcare tort reform during the Republican debate. Haley and the WSJ believe that excessive malpractice lawsuits increase healthcare costs by forcing doctors to pay for expensive insurance and by incentivizing unnecessary defensive procedures.

Healthcare costs are undoubtedly out of control. Yet the percentage of healthcare costs due to malpractice suits is modest and has been relatively stable over time.

Even if lawsuits were a major source of health cost inflation, tort law reform invites unintended consequences. Doctors may increase risky surgeries, for example, if they have less fear of being sued. Studies suggest that reforms have contributed to worse patient outcomes or increased use of certain procedures, implying higher costs.

The policies that cause high and rising health care costs are subsidies for health insurance (Medicare, Medicaid, Obamacare, and the tax exclusion for employer‐​paid health insurance premiums). Politicians looking to constrain health costs should trim these subsidies.

Libertarianism and Government Shutdowns


Jeffrey Miron

This article appeared on Substack on October 4, 2023.

What should libertarians think about government shutdowns due to Congressional failure to approve new spending bills? Libertarians oppose most spending affected by shutdowns, so one might assume they are on board.

That is not my view. While shutdowns suspend some government expenditures, the effect is temporary. Furloughed employees, for example, get back pay when the shutdown ends.

No evidence shows that shutdowns have slowed the path of government growth after reopening. Even the temporary reduction is small, since many discretionary programs continue, as does entitlement spending (which is more than half of federal expenditure).

The same caution applies to using tax cuts to shrink government. Milton Friedman famously argued that all tax cuts are good because they “starve the beast.” Even if Congress cuts taxes now, however, it can raise them later, which is what seems to happen in practice.

More broadly, process or institutional “fixes” to big government are unlikely to succeed. State balanced budget amendments do not seem to restrain spending, and requiring fiscal scoring from external agencies like the CBO leads to gimmicks that circumvent accountability. If the electorate wants more spending, politicians will find a way.

The only way to shrink government, significantly and sustainably, is to convince more people that smaller government is better.

The Pros and Cons of Decriminalization


Jeffrey Miron

This article appeared on Substack on September 29, 2023.

The United Nations has released a report that calls for ending criminal penalties for drug use. Decriminalization is in line with libertarian principles, and penalties against users generate substantial harms, even when jail terms are absent (lower employment prospects, loss of public housing, deportation, reduced individual liberty, and racial disparities in police interactions).

But legalizing use is a halfway measure that often fails to eliminate harm from prohibition or even makes things worse.

(Getty Images)

Legalizing possession, but not production, does not eliminate the underground market, so violence and quality control issues remain. Indeed, to the extent decriminalization increases demand, it expands the black market and thus causes more violence. This describes Oregon, where violence and overdoses failed to decline even after decriminalization.

Another risk is that the criminal justice resources freed up from decriminalization shift to increased enforcement against drug supply, making violence and quality control problems worse. Enforcement pushes more transactions out of the legal sphere and disrupts agreements between market participants, increasing the scope for violence.

These concerns might seem inconsistent with the experience of some cities, states, or countries that have decriminalized and experienced reductions in prohibition‐​induced harms. Portugal’s drug decriminalization, for example, is often seen as responsible for the country’s low drug mortality rate. Decriminalization in the Netherlands is similarly praised for producing low heroin use and low HIV prevalence among users.

The likely explanation is that, while these places have labeled their policies as decriminalization, the policy changes also reduced supply‐​side enforcement, implying less disruption of the underground markets. Thus these examples again show that eliminating supply‐​side prohibition is crucial.

The UN should call for total legalization, the only approach that will fully resolve the harms identified in its report.

Immigration Restrictions Prevent Mutually Beneficial Exchange


Jeffrey Miron

This article appeared on Substack on September 22, 2023.

The White House recently announced the granting of Temporary Protected Status (TPS) to Venezuelans who arrived in the US before July 31st, a special designation allowing them to stay and work for 18 months.

The announcement comes in large part as a reaction to the tens of thousands of migrants currently overwhelming New York City’s taxpayers, who have been paying $8 million a day to house asylum seekers.

The root of the problem is a provision of a 1996 immigration bill that requires asylum seekers to wait 180 days before receiving work authorization. This provision was likely meant as a deterrent to migration, but that is not happening.

Unfortunately, TPS may not resolve the problem because the current processing time for immigrant work visas is around 10 to 18 months. A real solution, changing the 1996 law, would require congressional legislation at a time when neither party is willing to touch immigration reform. The Biden administration is trying to shorten wait times for visas, but that attempt faces political and practical difficulties.

New York City Mayor Eric Adams hosts rally and delivers remarks calling for expedited work authorization for asylum seekers in New York, United States on August 31, 2023. (Photo by Selcuk Acar/​Anadolu Agency via Getty Images)

Given the choice, most asylum seekers would jump at a chance to work and would have no trouble finding jobs. The increased labor pool would be an economic boon to the city. Instead, under current policy, the immigrants that do find work illegally have to participate in an underground market subject to exploitation and abuse.

In short, we have a textbook situation where a prohibition on labor supply causes shortages, black markets, and losses for both business and labor. That New York City taxpayers have to pay millions to support these immigrants is ironic given that immigrants are normally a net fiscal gain, provided they are allowed to work.

TPS may ease the problem eventually, but more fundamental reform—legalization of more immigration—is a far better approach.

Backlash: Good Intentions Can Have Counter-Productive Consequences


Jeffrey Miron

This article appeared on Substack on August 31, 2023.

Many policies have good intentions and aim to address real problems in the economy or society. A standard concern, however, is that government attempts to fix such problems generate backlash, meaning heightened antipathy toward an intervention’s goal. Affirmative action or sexual harassment policies, for example, might increase resentment toward minorities and women.

A recent paper provides evidence of backlash in a different context:

The 1965 Voting Rights Act (VRA) paved the road to Black empowerment. How did southern whites respond? Leveraging newly digitized data on county‐​level voter registration rates by race between 1956 and 1980, and exploiting pre‐​determined variation in exposure to the federal intervention, we document that the VRA increases both Black and white political participation. Consistent with the VRA triggering counter‐​mobilization, the surge in white registrations is concentrated where Black political empowerment is more tangible and salient due to the election of African Americans in county commissions. Additional analysis suggests that the VRA has long‐​lasting negative effects on whites’ racial attitudes.

And, backlash seems to occur widely:

Do laws affect the beliefs and attitudes held by the public? Using data from [American National Election Surveys], the [General Social Survey], and Gallup …, I find robust evidence that virtually every major U.S. social policy law of the past half‐​century has induced significant backlash. That is, the public moved in the opposite ideological direction of each law.…

The Civil Rights Acts of the 1960s, the legalization of abortion in the 1970s, the relaxation of gun control beginning in the 1980s, the Defense‐​of‐​Marriage Acts of the 1990s, the legalization of marijuana beginning in the 2000s, the legalization of gay marriage in the 2010s, and more – across various categories of social policy and across the ideological spectrum, backlash has time and time again been the consequence.

The fact that laws can generate backlash does not, by itself, make them undesirable; benefits might still exceed costs. The possibility of backlash, however, should give pause about imposing “good things” on the citizenry. Sometimes the treatment is worse than the disease.

Are Police-Worn Body Cameras Useful?


Jeffrey Miron

This article appeared on Substack on August 24, 2023.

Over the past two decades, numerous countries and cities have adopted body‐​worn camera (BWC) requirements for some or all of their police officers. The primary motivation is to discourage misconduct by creating evidence of any inappropriate behavior.

BWC programs have always been expensive; beyond cameras and associated equipment, costs include administration, monitoring, and (video) file storage.

More recently, police groups in several U.S. cities have requested extra compensation in exchange for wearing BWCs, which makes such programs even more expensive.

So do BWC requirements generate benefits greater than costs?

The evidence is mixed. Some early studies found desirable effects, such as reductions in civilian complaints or reduced police violence, but other research estimates weak or even perverse impacts. A 2020 review offered a tepid endorsement.

More recent evidence, however, along with a related meta‐​analysis, seems to make a solid case for BWCs, finding a benefit to cost ratio of almost 5 to 1.

This cost‐​benefit analysis, however, did not incorporate the police stipends mentioned above (because they did not yet exist). Accounting for these reduces the benefit to cost ratio by about half.

The right policy then becomes less clear. Local police departments should presumably still be free to experiment with BWCs, since these are not obviously harmful and might provide useful evidence.

Yet BWC programs will probably become more expensive over time, assuming police unions negotiate for higher and higher stipends.

In addition, BWCs do not address the most fundamental problem with existing criminal justice systems: laws that should not exist in the first place, such as drug prohibition. Perhaps the greatest cost of BWC requirements, therefore, is detracting attention from this key issue.

Pig Kidneys to the Rescue?


Jeffrey Miron

This article appeared on Substack on August 17, 2023.

This past week,

Researchers at the University of Alabama at Birmingham published a peer‐​reviewed study showing that modified pig kidneys performed complex life‐​sustaining functions in a brain‐​dead patient for a full week.

In an apparent response, surgeons at NYU Langone Health announced that a kidney from a genetically modified pig continued to function well after 32 days in a brain‐​dead patient maintained on a ventilator, the longest period for such an experiment.

The patient has shown no signs of rejecting the organ, said Dr. Robert Montgomery, director of the NYU Langone Transplant Institute. But the research has not yet been published in a scientific journal.

This is interesting from a scientific perspective, and perhaps pig kidneys will end up being be more useful than human kidneys, if genetic engineering can reduce their probability of rejection.

Yet such transplants are presumably years away:

So far, transplants of genetically modified pig kidneys have been made only to brain‐​dead patients. Dr. Locke and her colleagues are in discussions with the Food and Drug Administration about launching a first clinical trial in live patients.


More than 800,000 American have kidney failure, and over 100,000 are on a waiting list for a transplant. Kidney dialysis can keep patients alive, but the gold standard treatment is an organ transplant.

Yet fewer than 25,000 kidney transplants are performed each year because of a scarcity of human donor organs. Thousands of people on the waiting list die each year.

How can policy address the current shortage? By legalizing organ sales.

Is Javier Milei a Libertarian?


Jeffrey Miron

This article appeared on Substack on June 22, 2023

Javier Milei is the Argentinian politician who just won the open primary in Argentina’s presidential election. The first round of the general will be October 22nd, with a final round in November, if needed.

Milei describes himself as libertarian, and the media have embraced that label. Should libertarians rejoice? Calm assessment suggests both optimism and caution.

Most of Milei’s policy positions are indeed libertarian: lower expenditure and taxes, privatization of state‐​owned enterprises, legalization of both drugs and organ sales, and reduced restrictions on gun ownership. Certain other positions are not the only reasonable ones for libertarians (eliminating the central bank, dollarizing the currency), but they are not anti‐​libertarian either. Milei is staunchly anti‐​abortion, which sets him apart from many libertarians, but in the company of others.

A potential red flag, however, is Milei’s apparent admiration for Donald Trump (and Jair Bolsonaro). Trump did sign a major tax cut, and his administration slowed the adoption of new regulation. His skepticism about military intervention abroad is also in the ballpark of libertarian views.

On many issues, however, Trump is staunchly anti‐​libertarian: immigration, trade, drug prohibition, Medicare, Social Security, and others.

More broadly, Trump exhibits utter contempt for the rule of law and the Constitutional limits on presidential power.

Thus I remain cautious about how Milei will govern, if he wins election. With luck, his expressed admiration for Trump and Bolsonaro was strategic, not genuine.

Defund the Police?


Jeffrey Miron

This article appeared on Substack on August 10, 2023.

The Defund the Police (DTP) movement raises an interesting question for libertarians. On the one hand, libertarians abhor excessive police violence, against minorities and generally. On the other hand, libertarians, and others, might worry that slashing police budgets could increase crime.

The way to balance these concerns is to repeal laws against victimless crimes, meaning bans against drugs, sex work, vagrancy, loitering, and the like. These laws serve no role in protecting people from violence or theft, and they generate their own negatives: underground markets, corruption, violence, and excessive overdoses.

In addition, laws against victimless crime exacerbate racism by empowering those police with racist attitudes to impose their views on minorities.

In a homicide investigation, police and prosecutors must prove means, motives, and opportunity; they cannot just say, “This person looks like a murderer, so lock him up.”

Under prohibitions of drugs or sex work, police can and do assert, “This teenager looks like someone who deals drugs, so I can stop and frisk.” Or, they demand sexual favors from alleged prostitutes. If some police are racist, this power gets applied in racially disproportionate ways.

Racism can also arise even when police address real crime (e.g., the Charles Stuart case). For violence and theft, however, procedural checks and balances, and the presence of multiple observers, lowers the scope for racism. Legalizing victimless crimes also helps attract police who want to serve and protect rather than “bust heads.”

DTP shares this perspective, opposing laws against buying or selling drugs, sex work, or nuisance offenses.

Libertarians and DTP do differ on a related issue: how to use the funds freed up by legalizations. DTP would transfer these to treatment and other social services; libertarians would lower taxes instead.

Libertarians and DTP nevertheless agree on a crucial issue: to make policing less racist, society must eliminate laws that criminalize private, consensual behavior.

Medicare and Social Security are Bad Policies, Regardless of the U.S. Bond Rating


Jeffrey Miron

This article appeared on Substack on August 4, 2023.

Fitch has just lowered its rating of U.S. debt from AAA to AA+. This is a modest step, but it reminds everyone that:

  1. According to projections from the Congressional Budget Office, the United States faces a perilous fiscal future; and

  2. The only plausible fix is slower growth of entitlements, especially Medicare and Social Security.

Conventional wisdom then concludes that the United States is between a rock and a hard place: it must risk fiscal catastrophe or cut widely popular and economically vital programs.

The political difficulty of cutting entitlements is undeniable; almost every voter either collects or expects to collect those benefits.

The economic value of these programs, however, is debatable.

Medicare subsidizes the purchase of health care. Standard economics holds that when government subsidizes a good, the economy produces and consumes too much relative to the efficient, laissez‐​faire outcome. (This holds even if health insurance markets suffer from asymmetric information and adverse selection. Those conditions might suggest intervention, but not subsidizing health insurance.)

Thus scaling back Medicare implies a more productive economy, with fewer resources devoted to health care and more to other goods and services.

Consistent with this view, abundant evidence suggests that health expenditure has a modest impact on health.

Social Security also lowers economic productivity by distorting savings and retirements decisions relative to a free market.

Regardless of the fiscal outlook, therefore, concern for economic productivity implies scaling back or eliminating both programs. The obvious adjustments are a higher age of eligibility for both Medicare and Social Security, plus larger co‐​pays and deductibles for Medicare. These changes can phase in over decades so that the pain is spread across many cohorts.

Reducing these programs will also have distributional implications, but these reinforce the case for cuts: both programs mainly benefit the middle class, not those living in poverty. Directly targeted anti‐​poverty programs (perhaps including Medicaid) and disability insurance are more reasonable ways to address distributional concerns.

Cutting Medicare and Social Security is therefore a no‐​brainer, if only the politics will let it happen.

The Culture Wars and Public Libraries


Jeffrey Miron

This article appeared on Substack on July 31, 2023.

A recent front in the culture wars is public libraries, such as in Front Royal, Virginia, where

a handful of residents ha[s] begun demanding the removal of certain books in the children’s section of Warren County’s only public library. Most of the titles involved LGBTQ+ themes.

In Libertarian Land, such conflicts do not arise, since public libraries do not exist.

Despite the word “public,” libraries are not a “public good” that private markets might undersupply.

The textbook public good is national defense. If any private group mounts an army that stands ready to defend the country, others will free ride. This makes it hard for the provider to finance its efforts and therefore discourages private provision.

No such issue exists for books; private provision is bountiful. People cannot free ride on book purchases by others.

The crucial benefit of leaving “libraries” to the marketplace is that no one’s tax dollars support the provision of particular books. If Amazon sells books that some people do not want their children to read, these people do not buy such books. Thus the polarization that results from public libraries is absent.

Advocates will respond that public libraries provide free access to books and thus benefit low‐​income families. That is mainly false; public libraries typically locate in middle‐​class neighborhoods and serve middle‐​income families.

Fans of public provision might also argue that such libraries provide more than free access to books: story time, community events, author book signings, and the like. Private book stores, however, can do and provide these services if demand exists, perhaps because it brings in paying customers.

Why Can Dogs, but Not Humans, Get Vaccinated against Lyme Disease?


Jeffrey Miron

This article appeared on Substack on July 25, 2023

An interview in the Harvard Gazette with Professor of Medicine Allen Steere explains:

[T]here are currently no vaccines for humans, although there are three for dogs. One had been developed in the late 1990s and pulled off the market in 2002, in part due to a vigorous anti‐​vaccination movement.

Steere goes on to explain that concerns arose about a possible side‐​effect of the vaccine, but those concerns turned out to be invalid. Thus, general vaccine hesitancy, combined with a specific but misplaced fear about the early vaccine have meant no availability for humans so far.

The interview does not address one other factor: the FDA. Absent government restrictions on new medicines, people in earlier decades would have been able to access the initial vaccine, and the manufacturer or independent groups could have collected data on whether the alleged side effect was a genuine problem.

The good news is that a new vaccine is apparently near completion of its phase 3 trials, and an mRNA vaccine is also in the works. Still, many have suffered unnecessarily because of government restrictions on medicine.

The Financial Implications of the Death Penalty


Jeffrey Miron

This article appeared on SubStack on July 20, 2023.

One argument for the death penalty is that the usual alternative—life in prison without possibility of parole—imposes a financial burden on taxpayers (about $60,000-$70,000 per death row inmate per year, according to a recent estimate).

Yet capital punishment is costly, too:

Contrary to popular misconception, the expense of the death penalty does not lie in the “end less” appeals of death sentences. Although appeals do consume relatively more resources, capital trials also consume more resources than similar trials with a maximum sentence of life in prison. One early study found the additional trial costs exceeded those of appeals by a factor of four (Cook et al. 1993). Estimates of the marginal capital trial cost vary, but Collins et al. (2015) offer a middling figure of just under $1,500,000 (cf. Roman et al. 2009). The reasons for the increase are several. Attorneys spend more time preparing cases, and many states require the appointment of two defense attorneys to any defendant who cannot afford private counsel. Jury selection is more complicated. The process can take days or even weeks, partly because of the need for “death qualified” jurors, i.e., individuals who neither universally oppose nor support the death penalty. Capital cases also produce more hearings and court filings. Expert witnesses are unavoidable. Mitigation evidence, which argues for leniency in punishment, can require a significant travel budget. For these reasons and more, capital trials are uniquely expensive.

One overall assessment concludes that

In the 32 states in the Union where the death penalty is legal, as well as the federal government, the death penalty has grown to be much more expensive than life imprisonment, whether with or without parole. This greater cost comes from more expensive living conditions, a much more extensive legal process, and increasing resistance to the death penalty from chemical manufacturers overseas. These costs could even become higher, pending the outcome of various lawsuits against various states for their “botched” executions. Each death penalty inmate is approximately $1.12 million (2015 USD) more than a general population inmate.

And in at least one state, the implication of the increased expenditure is ironic:

When a local government bears the expense of trial, it must raise funds or reallocate them from other sources. In Texas, among other states, the cost of trial is borne primarily at the county level. A panel of Texas county spending over the last decade, constructed from audited financial statements, shows counties meet the expense of trial by raising property tax rates and by reducing public safety expenditure. Property crime rises as a consequence of the latter. The death penalty may therefore impede criminal deterrence if its finance is left to local, rather than centralized government.

Thus not only does the death penalty burden taxpayers; it seems to increase certain kinds of crime. Existing evidence suggests executions have minimal impact in deterring violent crime like homicide.

Reasonable people might still support the death penalty, for moral reasons (“an eye for an eye”).

On consequentialist grounds, however, the case for capital punishment is weak.

Maine Legalizes the Sale of Prostitution Services


Jeffrey Miron

This article appeared on SubStack on July 3, 2023.

Last week Maine legalized the sale—but not the purchase—of prostitution services, becoming the first state to enact such a law. (Nevada allows legal prostitution in counties with fewer than 700,000 residents; Rhode Island had no law against indoor prostitution between 1980 and 2009.)

Maine’s policy is a step in the right direction, but as with laws that legalize drug possession but not production or sale, removing criminal penalties from only one side of the market is a minor step that can be worse than no legalization at all.

Under partial legalization, the prostitution market remains underground, with all the attendant negatives: violence, corruption, and poor “quality control,” meaning greater transmission of sexually transmitted diseases.

De‐​criminalizing only the supply side improves the well‐​being of prostitutes. The risk, however, is that when other evils of underground markets continue, some observers assert that legalization has failed. This happens repeatedly in debates over decriminalized drug markets.

The ideal policy is therefore full legalization of prostitution that involves consenting adults. Child prostitution and trafficking are different stories, since both involve coercion (presumptively for children, as with statutory rape laws, or explicitly for children and adults when traffickers use deception and force). The most effective way to eliminate these components of the market is full legalization of adult, voluntary transactions.

Student Loan Forgiveness


Jeffrey Miron

This article appeared on Substack on June 29, 2023.

Later today, or next week at the latest, the Supreme Court will announce its decision in two cases that challenge the Biden administration’s cancellation of $400 billion in federal student loan debt.

The legal issues are beyond my expertise. Regardless of the Court’s decision, however, loan forgiveness is deeply misguided as a matter of policy.

Those who took out loans did so willingly. Presidential cancellation, at taxpayer expense, undermines the rule of law and makes a mockery of people who honor their commitments, or accept the consequences of failing to do so, even when that is difficult.

If this forgiveness stands, future borrowers will take out even more debt, believing that future presidents will likely cancel some of it. They will probably be right.

This moral hazard increases the cost of the loan program; more and more is paid out, and less and less is re‐​paid.

Worse, subsidizing education loans, and especially forgiving them ex post, discourages potential borrowers from using common sense to decide how much education to acquire and whether borrowing to pay for it is sensible.

Some amount of, and certain kinds of, education are beneficial for almost anyone.

Yet more and more education is almost never the right choice. Any decision to acquire education should balance the benefits against the costs (including explicit costs, like tuition, and the opportunity costs of foregone income). By making costs artificially low, loan forgiveness encourages excessive or poorly chosen kinds of education.

Students loan forgiveness, moreover, mainly helps higher income borrowers, since they take out disproportionately larger loans. Thus Biden’s proposal is regressive.

Last, loan forgiveness by executive action is ripe for political abuse; politicians will do so in ways that benefit voters they can “bribe” into staying or becoming their supporters.

In Libertarian Land, governments would not subsidize student loans. Such a policy, however, at least has good intentions. Presidential loan forgiveness is just politically motivated theft.

Harsh Fentanyl Laws: Doubling Down on the Wrong Approach


Jeffrey Miron

This article appeared on Substack on June 22, 2023

The New York Times reports that multiple states are responding to the opioid overdose crisis by passing harsh new laws aimed at fentanyl:

In the 2023 legislative session alone, hundreds of fentanyl crime bills were introduced in at least 46 states, according to the National Conference on State Legislatures. Virginia lawmakers codified fentanyl as “a weapon of terrorism.” An Iowa law makes the sale or manufacture of less than five grams of fentanyl — roughly the weight of five paper clips — punishable by up to 10 years in prison. Arkansas and Texas recently joined some 30 states, including Pennsylvania, Colorado and Wyoming, that have a drug‐​induced homicide statute on the books, allowing murder prosecutions even of people who share drugs socially that contain lethal fentanyl doses.

This approach is deeply misguided. Rather than further criminalizing fentanyl, federal and state governments should legalize it, along with all other opioids (and all other illegal drugs).

Most overdoses from illicit drugs result from accidental consumption of excessively potent or adulterated versions, since quality control is difficult in an underground market. That reflects the Iron Law of Prohibition.

In a legal market, fentanyl would be widely available, but in clearly marked dosages, allowing users to consume without risk of overdose. That is what occurs now for other legal but potentially dangerous products, such as alcohol or over‐​the‐​counter medications like acetaminophen (Tylenol). Overdoes occur for legal “drugs,” but they are rare and reflect deliberate excessive consumption.

Governments almost always try to fix society’s problems with more government. When the original problem resulted from too much government, that approach is especially unfortunate.

Arbitrary Redistribution


Jeffrey Miron

This article appeared on Substack on June 19, 2023

A common view attributes economic inequality to the evils of markets—greed, corruption, family connections, luck, and so on—rather than to differences in economic productivity.

Some wealth is no doubt “ill‐​gotten,” or at least not directly related to one’s own contribution to the economic pie.

Yet many differences in economic success result from government interventions that create winners and losers, and in arbitrary or even perverse ways.

Government licenses to become a lawyer, doctor, hair braider, plumber, or other professional raise the income of those who obtain these licenses, regardless of whether more talented.

Zoning regulation protects the wealth of those lucky enough to have bought land before such restrictions existed.

Much regulation, of all kinds, imposes substantial fixed costs. Larger firms more easily absorb these, while small firms face a greater barrier to entry. Regulation also creates the opportunity for less principled businesses to game the system, implying honest firms lose out.

When governments build schools, roads, hospitals, office buildings, military equipment, and other infrastructure, they contract out with private firms. Ideally government chooses the most efficient firm, but in practice cronyism and corruption play substantial roles.

Restrictive immigration policies prevent people in poor countries from earning substantially higher wages.

Medicare reimbursement rules reward less scrupulous health care providers, who manipulate billing codes to maximize their revenues.

Taxpayer‐​funded universities transfer wealth to families with more college‐​bound children.

Government protections for unions raise member wages but cause others to be underemployed. Minimum wage laws have similar effects.

Rent controls discourage construction of new housing, raising costs for those who fail to secure controlled apartments.

The corporate income tax penalizes not just shareholders but customers and employees, who are often less well off.

Progressive or complicated tax codes create lucrative incomes for the lawyers and accountants who help individuals and businesses avoid or evade these features.

I could go on, but you get the point!

The fact that government causes these arbitrary redistributions is not, by itself, reason to avoid all intervention. If a policy generates large benefits, any resulting mal‐​distribution might be a necessary evil.

In a few cases, moreover, redistribution is the flip side of a potentially beneficial effect. Patents and copyright create monopoly profits that incentivize innovative or creative activity, perhaps benefitting society overall.

Nevertheless, policy evaluations should recognize the scope for arbitrary redistribution as one negative side effect of interfering with free markets.

Likewise, any discussion of redistribution should recognize that government, rather than the free market, is often the bigger offender.

Taxpayer Funding for Religious Schools?


Jeffrey Miron

This article appeared on Substack on June 13, 2023

The state of Oklahoma has recently approved a charter for the St. Isidore of Seville Catholic Virtual School, whose curriculum will include religious teaching. Taxpayers will fund the school, so a battle will ensue over whether such funding is desirable or constitutional.

Economic reasoning suggests three possible justifications for government support of education.

First, one person’s education might benefit society more broadly. Economic productivity might be higher, for example, if everyone has mastered “the three Rs.” Some individuals, however, might ignore this “spillover” and therefore choose too little education relative to the social optimum.

Second, people for whom education would be productive (by raising their future income) might underinvest due to myopia, suggesting that even without spillovers, the laissez‐​faire level of education might be too low. Some parents, in particular, might choose too little education for their children unless policy makes education cheaper.

Third, people for whom education would be beneficial, with or without externalities, and even without myopia, might have insufficient income to pay for private education and face difficulty in borrowing to finance such an investment (credit constraints).

Reasonable people can debate whether these arguments are convincing. Each has some plausibility, yet each is easily overstated.

In Libertarian Land, governments play no role in education, whether via mandatory schooling, public schools, funding for vouchers or charters, state colleges and universities, or subsidized student loans.

The reason is that, while government support might have the benefits described, this support requires government to define what constitutes education, as the Oklahoma controversy illustrates. Government definition of education limits variety and innovation, and in the extreme facilitates thought control. It is no accident that totalitarian regimes exercise extreme control over their educational systems.

If one nevertheless takes as given that, for the foreseeable future, government will fund education, and have the power to determine what kinds of education receive this support, should taxpayer funding be available for religious schools?

Assuming such education meets the curricular standards that government imposes on all schools, public and private, the answer is yes.

Why? Because religious schools can generate the three benefits that potentially justify government support of education. This is the standard reasoning for allowing private religious schools (or home schooling) to satisfy mandatory schooling laws.

Stated differently, allowing taxpayer funding to religious schools that meet the criteria for funding under the state’s general rules (e.g., teaching the three Rs) is the neutral position for government with respect to religion. This neutrality is the natural interpretation of the Constitution’s establishment clause, which states that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”

Thus libertarians would prefer little or no government involvement in education. If government does fund education, however, it should not exclude religious schools a priori but instead determine funding based on the criteria that might justify such intervention in the first place.

Legalizing Organ Sales


Jeffrey Miron

This article appeared on SubStack on May 25, 2023.

Organ sales are illegal in the United States and most other countries (Iran is a partial exception). The National Organ Transplantation Act of 1984 states, “it shall be unlawful for any person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce.” The penalty for breaking the law is a fine of $50,000 or up to five years in prison, or both.

In Libertarian Land, organ markets are legal. This makes everyone better off.

Consider first kidneys. People have two but can live normally with one. If the kidney market were legal, a person whose kidneys fail could purchase from a willing seller, and both could then live healthy lives.

The seller would risk that their remaining kidney might cease to function, but in a legal market, the supply of kidneys would be large and the price low, so such persons could likely buy a kidney from some future seller.

The situation is similar for liver transplants; recipients need only a partial transplant, and the donor’s remaining liver regenerates.

What about more extreme cases, where someone wants to sell a heart or other vital organ?

Such behavior might sound irrational, but imagine an aging parent in poor health (unrelated to their heart) who could earn a large sum by, in effect, committing suicide and selling their heart. The income might make it possible for that person’s children to attend better schools, or migrate to a safer country, or escape poverty. All at little cost to the quantity or quality of the seller’s life.

Why should policy interfere with such a trade? This act benefits the organ recipient as well, so it makes all participants better off. Most real world examples are less extreme, but the same principles apply.

One possible objection to legal organ markets is that some people might sell out of desperation, against their long term interest. A reasonable response is to require informed consent, rather than banning the organ market.

A second possible objection is that only the rich will benefit from legalized sales. That is unlikely, since the increased supply of organs due to legalization will drive organ prices down. Plus, private or public charities can subsidize organ purchases for low income patients, while keeping the trade legal to foster greater supply. Government funding for organ purchases might even pay for itself by improving recipient health and reducing public expenditure on health care (e.g., dialysis treatment for kidney failure).

Thus a legal market for organ sales would have the key feature of other markets: voluntary exchange that benefits both sides of the transactions.

Repeal the Debt Ceiling


Jeffrey Miron

This article appeared on SubStack on May 12, 2023.

Unless Congress cuts spending or raises taxes in the near future, the federal government will hit its debt ceiling later this summer. At that point the United States will either default or pursue “extraordinary measures,” such as minting a trillion dollar coin.

President Biden wants a “clean” increase in the ceiling; Republicans want a substantial cut in spending in exchange for raising the limit. In all likelihood, the two sides will appear to make no progress until the last second before default; they will then jointly announce a compromise that both sides portray as victory.

My view is that the United States should eliminate the debt ceiling entirely.

The potential benefit of a ceiling is that it might restrain spending. The U.S. fiscal situation is on a path to insolvency, and slowing expenditure growth—not raising taxes—is the only effective way to address this issue.

Yet it seems unlikely that “process reforms” like debt limits will restrain spending. During recent negotiations, both sides ruled out cuts to Social Security or Medicare, even though these programs are the most important causes of excess expenditure growth.

The debt ceiling, moreover, has downsides. At a minimum, it generates unneeded uncertainty every few years whenever the debt gets close to the limit.

Worse, the ceiling distracts attention from the fundamental question: how can the United States reconcile its limited ability to pay for entitlement spending with the much greater promises it has made for such spending.

Until the nation grapples with that issue, the debt limit is a sideshow. And if the country adopts an affordable path for entitlements, a debt limit is unnecessary.