Who Really Pays for Trade Policy?

Today, John Cochrane explains why the claim that “foreigners pay the cost of a tariff” is an oversimplification. Andrew Roberts explores how Britain’s diplomats helped Churchill win World War II. And Peter Blair Henry joins a key government oversight committee in his birthplace of Jamaica.

Freedom Frequency

Who Really Pays for Trade Policy?

In this week’s Grumpy Economist Weekly Rant, John Cochrane uses basic economic principles to examine a central claim in current trade debates: that foreigners can be made to pay US tariffs. Rather than focusing only on who makes the initial payment, Cochrane argues, the analysis must follow where the money ultimately goes and what the transaction means in terms of real goods and services. Even if foreigners bear the full burden of a tariff, Cochrane explains, they ultimately need to obtain dollars by selling more goods to Americans—or Americans must use the foreign currency they receive to buy more goods abroad. The same logic applies to claims about predatory trade and intellectual-property payments: Receiving more money from abroad ultimately matters because of what that money can buy. Trade policy, he argues, is clearer when policymakers look beyond the direction of the payment to the underlying exchange of goods and services. Watch his rant here.

Revitalizing History

The Secrets of Churchill’s Diplomats with Lord Peter Ricketts

How did Britain’s diplomats help win World War II—and shape the world that followed? On the latest episode of Secrets of Statecraft, Lord Peter Ricketts, former head of Britain’s Diplomatic Service and its first national security advisor, discusses the extraordinary men and women of the wartime Foreign Office, from Churchill’s uneasy relationship with Charles de Gaulle to Freya Stark’s espionage work and the creation of the UN and NATO. He also explains how Britain’s diplomats confronted the decline of British power—and why the postwar international order may now be coming apart. Watch their conversation here.

The Declaration at 250: America’s Promissory Note

Commenting on a paper by Princeton Professor Robert P. George on the Declaration of Independence in a Stanford Law School podcast, Research Fellow Jonathan Gienapp argues that the Declaration of Independence rested on a positive, political conception of liberty. He says liberty in the founding era meant nondomination, being self-governed rather than ruled by an alien will. The Declaration's promise, he says, was republican self-government and collective equality, seen clearly in its grievances against King George III. Listen to the podcast here.

Emerging Economies

Peter Blair Henry Named to JAMRROC Oversight Committee of Jamaica

Senior Fellow Peter Blair Henry was named to the Jamaica Reconstruction and Resilience Oversight Committee, affectionately called “JAMRROC,” Jamaica’s prime minister announced on Sunday.  “His knowledge, experience and deep commitment to Jamaica will help strengthen the work of building a more resilient country and advancing our development,” Jamaican Prime Minister Andrew Holness said in a statement posted on his Twitter account. “I thank Professor Blair Henry for answering the call to serve.” JAMRROC is an independent body tasked to monitor reconstruction efforts after natural disasters and help the island nation generate long-term resilience. See more here.

Revitalizing American Institutions

Fortunate Sons: Elite Political Selection in American History

In a new paper published by the National Bureau for Economic Research, Senior Fellow Andrew B. Hall and coauthors explore the family backgrounds of all members of Congress born between 1830 and 1950. Using census data, they find that in the 19th century, “[members of Congress] as adults held roughly three times the wealth of demographically matched controls. They also come from economically elite families: their fathers earn more, attain more education, and hold more wealth.” By 1940, they found 60 percent of members of Congress up to age 40 had a college degree, compared with only 5 percent of that cohort in the general population. “Our results document a Congress drawn from the most fortunate families in American society in every cohort we observe,” they write. Read more here.