Today, David Henderson celebrates the foundational economic insights expressed in Adam Smith’s 1776 masterwork, The Wealth of Nations; Condoleezza Rice joins the GoodFellows to analyze the war in Iran; Richard Epstein defends the war and identifies important governance requirements for stabilizing Iran following the fighting; and Miles Yu speaks with Elizabeth Economy about how the current Trump administration’s China policy compares with the first Trump term’s approach to China.
Economic History
At Defining Ideas, David R. Henderson highlights the high points of Adam Smith’s economics masterwork, The Wealth of Nations. Smith’s insights, rigorously researched and explained, still hold up magnificently, Henderson writes. The division of labor, gains from trade (including across national borders), the nonsense of mercantilism, the fatal flaws of central planning: All spring from the hand of the Scottish economist. At the same time, modern thinkers who try to distort or ignore Smith’s book are easily corrected by reading it, Henderson argues. For instance, Smith did not advocate income taxes or demand antitrust laws. Henderson makes the case that The Wealth of Nations endures because it transcends rhetoric—and provides a modern corrective to recurrent misunderstandings about how to ensure prosperity and freedom. Read more here.
War in Iran
Does the current conflict in the Middle East suggest that America has learned from its recent past wars? Hoover Institution Director Condoleezza Rice joins GoodFellows regulars Sir Niall Ferguson, John Cochrane and Lt. Gen. H.R. McMaster to discuss the prospects of an oil “shock” prompted by a prolonged closure of the Strait of Hormuz as well as a political “shock” back in the US when voters go to the polls in November. The panel also covers China and Russia’s losses in terms of stature and friendly regimes, plus what the Anthropic-Pentagon legal kerfuffle suggests about the role of emerging technology in history’s first AI-enabled war. After Rice departs, the GoodFellows also reflect on the 250thanniversary of The Wealth of Nations. Watch or listen here.
US Foreign Policy
Writing in Civitas Outlook, Senior Fellow Richard Epstein pushes back against criticisms of the joint US-Israeli military campaign against Iran. Epstein addresses the timing of the campaign, noting that even if the risk of an “imminent” attack by Iran on the United States or its allies was low, military action could still be justified. Looking ahead, the law professor says, “Once the dancing in the streets has stopped and the regime is overthrown, the hard work begins.” Epstein emphasizes the need for an independent security force in Iran to keep remnants of the Islamic Revolutionary Guard Corps in check and the importance of instituting economic reforms that will allow private market activity and wealth creation to flourish in postwar Iran. Read more here.
Confronting and Competing with China
On this week’s episode of China Considered, Senior Fellow Elizabeth Economy sits down with Visiting Fellow Miles Yu, who served as Secretary of State Mike Pompeo's principal China policy advisor during the first Trump administration, to discuss his journey from experiencing China's Cultural Revolution to shaping US policy at the State Department. Yu explains his role in shifting American policy during the first Trump administration from transactional engagement toward addressing ideological differences between the two systems, including elevating human rights and supporting Taiwan. The two then debate whether the second Trump administration represents continuity or departure from the first term's approach, particularly regarding democracy promotion and alliance-building. Read more here.
Answering Challenges to Advanced Economies
The Hoover Institution invites you to attend Productivity Gains and Labor Pains: What Will AI Do to Jobs? on Tuesday, March 17, 5:00-7:00 pm PT in Hoover’s Hauck Auditorium. This timely and thought-provoking discussion will consider how AI is reshaping the workplace and what leaders need to do in response. Speakers will include Hoover Institution Director Condoleezza Rice, Distinguished Visiting Fellow Rishi Sunak, former Commerce Secretary Gina Raimondo, and top economics researchers from LinkedIn and Anthropic. Learn more and register here.
Artificial Intelligence
In a post at the Free Systems Substack, Senior Fellow Andrew B. Hall shares findings from a recent experiment he conducted using artificial intelligence to help make sense of the recent primary elections in Texas. Hall and his collaborators set out to answer a core question: “When the polls and the markets disagree, and nobody really knows what’s going to happen, can AI help you figure it out before everyone else does?” One of the researchers’ most important findings was that, in the realm of real-time election analysis and prediction market trading, “the most productive frontier of AI isn’t replacing experts—it’s making experts dramatically faster.” Hall says the upcoming midterm elections will be “strange” because this will be the first time when “frontier AI models will be in the hands of everyone simultaneously: traders, campaigns, journalists, ordinary voters.” Read more here.
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