The Trump Administration's Latest Protectionist Trick: Call All Foreign Trade "Unfair"

Modern prosperity relies heavily on international trade. No one single country, even one as resource-rich as the United States, produces everything its citizens want or need. The premise of international trade is that people specialize in what they do well and exchange with others who specialize in something, else, and do so across international borders. It is through international trade that countries prosper. From food and clothing to smartphones and automobiles, international exchange allows producers to reach global markets while consumers gain access to goods that would otherwise be more costly or scarce. 

Yet last week, the Trump's Office of the United States Trade Representative (USTR) claimed that foreign exports are inherently unfair by saying "U.S. trading partners producing more goods than they can consume domestically...displaces existing U.S. domestic production." By redefining imports as evidence of unfairness, the argument treats the presence of foreign goods as a problem rather than a benefit. This view of economics and trade misunderstands the purpose of trade and risks harming the very Americans it seeks to protect. 

Imports Are Benefits, Not Punishment

A common mistake in the Trump administration's line of thinking is that is treats nations as if they were corporations competing for market share. Under this "logic", every import is portrayed as a concession to foreign producers while exports are celebrated as national triumphs. This narrative might be effective for political optics, but bears little resemblance to how markets actually function. 

This misunderstanding largely stems from the mistaken belief that the economy is a fixed pie in which one country's gain must come at another's expense. In reality, trade expands the pie by allowing individuals and businesses to specialize in what they do best and exchange with others who do the same. Trade allows both sides to become better off because each is exchanging something they value less for something they value more. By expanding opportunities for specialization and exchange, international trade increases overall prosperity rather than simply redistributing a fixed economic pie. 

The Protectionist Redefinition

Calling foreign exports inherently unfair is not an economic argument so much as it is a bastardization of the word "fair." In traditional trade policy debates, unfair trade practices refer to specific policies that distort competition, such as subsidies and state-owned enterprises. As imperfect as it arguably is, it is why a World Trade Organization exists. The Trump administration throws out that entire framework out the window. What is going on is that the administration is asserting that the act of selling goods to Americans is suspect if the seller happens to be located outside of the United States.

It is absurd because this approach eliminates the need for evidence or analysis. The argument uses circular logic in which foreign exports are declared unfair simply for being foreign exports. Such "reasoning" turns market competition into exploitation, success into cheating, and consumer choice into economic wrongdoing. Any successful foreign business can be labeled as "unfair", thereby making the fairness argument meaningless. It is an approach that replaces serious economic analysis with farcical economic nationalism. 

What is more is that this logic mirrors the rhetoric behind "Buy American" or "buy local". If purchasing foreign goods is harmful, then presumably Americans should only buy domestically produced goods. But why stop there? With that same logic, it should be wrong to buy goods and services from another state rather than one's own community or neighborhood. Taken seriously, this reductio ad absurdum "logic" collapses when applied consistently. Economic progress has always depended on the widening the scope of trading partners. Restricting trade based on geography does not create wealth. It merely limits the ways in which prosperity can flourish.

Making America Pay Again

This protectionist mindset is framed as a way to shield American workers and industries from "big, bad foreign competitors." In reality, protectionist measures like tariffs impose broad costs onto the U.S. economy. Tariffs reduce competition and restrict supply, which results in higher consumer prices, fewer jobs, and lower economic growth. What is framed politically as sticking it to foreign countries ends up being a tax on the everyday American. 

Those higher costs ripple throughout the broader economy. Consumers pay more for finished goods, while American businesses pay more for imported components and raw materials that they rely on to produce their own products. In many industries, these inputs are essential to maintaining competitiveness. By raising their costs, protectionist policies ultimately make American firms less productive and less able to compete both at home and abroad. 

Those Who Trade Together Stay Together

Trade does not merely affect prices; it shapes the broader strength of the nation. Declaring foreign exports unfair and erecting trade barriers risks weakening the very economic foundations that sustain U.S. competitiveness and strategic influence. Driving up costs for American firms leaves them less capable to compete in the global economy. A strong economy is a prerequisite for a strong national infrastructure and robust national security, and protectionism undermines both. 

These costs extend beyond domestic production. They also damage alliances and global relations. Tariffs and other protectionist policies often push allies into the arms of rivals, thereby diminishing national security. At the same time, these measures slow domestic production and reduce the efficiency of U.S. firms, which undermines the critical base for U.S. infrastructure and security. In other words, this approach risks making the country less secure, less innovative, and less influential on the global stage. 

Old Trade Fallacies Make a Comeback

Declaring foreign exports "unfair" substitutes political rhetoric for analysis. By assuming that imports are evidence of wrongdoing, the argument ignores the principles that make international trade beneficial: specialization, voluntary exchange, and consumer choice. This is just the latest manifestation of the same idiotic reasoning behind "Buy American' or "buy local" campaigns: restricting trade based on geography or origin does not create prosperity; it limits it. The zero-sum logic of protectionism is fundamentally at odds with how markets work. 

The consequences of these policies extend much beyond economic theory. These protectionist measures raise costs for consumers, increase inefficiencies for businesses, and undermine the strategic and economic advantages of maintaining robust global trade relationships. Far from protecting Americans or making America great again, these measures punish them, reduce prosperity, and weaken the U.S.' ability to adapt in a competitive world. If the U.S. government treats all foreign goods as guilty by default, the ones who will lose bigly will be the American people. 

City Hall Shouldn't Bag Your Groceries: A Case Against Government-Run Grocery Stores

Last week, New York State Representative Zohran Mamdani won the Democratic primary for the New York City mayoral election. In addition to being a Democrat, Mamdani is part of the Democratic Socialists of America (DSA), which is the U.S.' largest socialist organization and represents the Far Left in the U.S. Forget Mamdani's anti-Semitism for a moment. If you read his platform, he is a major proponent of the idea that the government should give the people things for free or should heavily subsidize them. He has advocated for many ill-conceived policies that I have previously criticized, whether it is rent control, fare-free buses, or raising the minimum wage to $30. Today, I would like to criticize another one of his ridiculous ideas: city-owned grocery stores. 

Mamdani sees food prices as being out of control due to profit. He would like to "create a network of city-owned groceries focused on keeping prices low, not making profit." He believes that he can create savings by having the government pay for capital costs while waiving property taxes for these grocery stores. In a TikTok campaign video, Mamdani said that grocery stores should not operate on profit motive, but their mission would be "lower prices, not price gouging." 

Other proponents have argued that government-run grocery stores could increase access to healthy food, especially in areas with food deserts. Their idea is to provide grocery stores to neighborhoods that seem "economically unfeasible." This is where wishful thinking collides into reality in a rather unpleasant way. Similar to when I critiqued Kamala Harris' price controls on groceries last year, Mamdani has a profound misunderstanding of how markets work generally and specifically how the grocery store market works.

How big of a problem are food costs? Yes, food prices have increased. We have pandemic-era expansionary monetary policy and fiscal policy to thank for that price increase. More to the point, as U.S. Department of Agriculture (USDA) data shows, food at home as a percent of disposable income decreased from 12 percent in 1964 to 5 percent in 2024. In the 1940s, it was a quarter of disposable income. If food prices are not a primary strain on people's finances, this makes government-run grocery stores a less urgent policy issue. 

The nature of the grocery market. The grocery store market is a highly fragmented market. Not only that, but Mamdani's premise about grocers' motives is wrong. If grocery stores were looking to gouge customers, they would make a lot more money. In spite of most people believing the contrary, the reality is that grocery stores operate with razor-thin profit margins, ranging from 1 to 3 percent.

The joy of profit motive. Private firms have something that a public-sector one lacks: profit motive. Maximizing profit means maximizing the difference between revenue and expenses. As this article from the Foundation for Economic Education (FEE) reminds us, profit motive incentivizes lowering the cost of inputs (e.g., shopping carts, cash registers), innovation, scaling supply chains, and effectively meeting customer demands. This more often than not leads to lower prices and higher quality. 

Perverse incentives. In contrast to profit motive, city-operated grocery stores create perverse political incentives, including price manipulation, product selection, staffing decisions, and remuneration for political gain. The risk for cronyism minimizes any likelihood that Mamdani's dream would come true. 

Lack of business viability. Private grocery stores have enough trouble with profit margins. Again, city-run grocery stores do not have profit motive to optimize efficiency. They would struggle without relying on subsidies or government funding. That is not mere economic theory. The "best" success story I could find is one small government-owned store in the rural area of Erie, Kansas. This store has created a modest profit of 1.1 percent, required volunteers, and relied on donations. The supposed success story of Erie operated more like a co-op than it did an actual grocery store. However, on the whole, government-run grocery stores have not been viable, as has been the case in Baldwin, Florida and Little River, Kansas. 

That does not even count the catastrophic government ownership of food with Venezuela, the former Soviet Union, or Maoist China and the Great Leap Forward, the latter of which caused the deaths of upwards of 55 million people. I understand that the United States is not the same as communist China, government-run grocery stores come with the same centralized control and bureaucracy, price fixing, and lack of profit motive that the aforementioned Communist countries faced. All the same, it should make us pause and question how much we want the government in charge of food distribution and sales.

Case studies in proxy markets. As we question whether or not New York City (or any municipality) should operate grocery stores, it would be helpful to look at proxy markets. Some in favor of Mamdani's proposal, such as the opinion editor at Washington Post, point to liquor control states where government handles the distribution and sale of all alcohol. That is a bad argument because government ownership of liquor sales resulted in higher prices (Siegel et al., 2014), which undermines Mamdani's fantasy that he can lower grocery prices. In addition, take a look at the New York City's very own Housing Authority, which is straddled with $78 billion with unmet capital needs. I feel like I am beating a dead horse, but a lack of profit motive results in wasteful spending from the government. 

Postscript. It is amazing how socialism's loudest proponents are well-off, educated theorists who understand nothing of how the real world works. Government-run grocery stores face challenges stemming from a lack of profit motive, including inefficiencies and political manipulation. The private-sector grocery market is highly competitive with tiny profit margins. Because of those slim profit margins, government-run grocery stores would have to rely on considerable government funding, which would further drain taxpayers. Private businesses are better equipped to meet customer demands, lower prices, and innovate. Private firms have the advantage of "massive economies of scale, decades of market experience, and complex supply chains." What government-run grocery stores will do is increase prices and lower quality for the citizens that Mamdani is purporting to help. 

Providing tax incentives to grocers and removing zoning laws are two policy alternatives I can come up with off the top of my head. Or in the case of New York City specifically, you can lower the high sales tax and minimum wage, both of which are costs passed on to the everyday grocery shopper. We can sit around and spitball ideas to make groceries more affordable, but I will conclude by unequivocally stating that the government has no business selling groceries.

President Javier Milei Improved Argentina in His First Year as Planet's First Libertarian President

As much as I love Argentina culturally, its economy has been ruined by nearly eight decades of Peronist government largesse, including gargantuan government redistribution programs, protectionism, an exceptionally interventionist monetary policy in which the central bank printed money like it grew on trees, and general disregard for property rights (not to mention the civil rights abuses throughout Argentina's modern history, especially in the 1970s). Argentinians were so dissatisfied with the rampant inflation, eroding purchasing power, and pervasive poverty that in 2023, they elected the first self-identifying libertarian head of state, Javier Milei. It is more than Milei's eccentric personality, which included waving a chainsaw at political rallies promising how he was going to cut government spending. Milei had an established career as an economist, author, and professor prior to becoming President. 

This week commemorates the one-year anniversary that he assumed his role as head of state for Argentina. So-called conventional wisdom predicted that Milei's "shock therapy" would make matters worse for Argentina. While I was thrilled to see a libertarian head of state that could potentially be an inspiration to other world leaders to cut back on regulations, taxation, and government spending, I knew he had to contend with a lot. Plus, Argentina had been ranked as a repressed economy by Heritage Foundations' Economic Freedom Index prior to Milei's election. It turns out that in spite of the political and economic obstacles he had to face, Milei had a successful first year. 

• Within the first few months, he was able to cut enough government spending where Argentina had a budget surplus for the first time in over a decade. Milei has continued to generate a budget in subsequent months (IARAF). When you compare Milei's surpluses to previous deficits, the difference is astounding. It is even more so when you consider that Argentina has spent the last 113 out of 123 years running up deficits. 

 

• Milei's elimination of rent control was so effective that it lowered housing prices while expanding the housing supply. 
• Milei has also passed a daily average of 1.8 deregulations since he entered office, which is significant because Argentina is one of the most regulated countries on the planet and its economic growth is thus stifled by regulations. This does not even include trimming the government from 19 ministries to nine ministries. 
• In October 2024, monthly inflation dropped to 2.7 percent, which was about 30 percent a year ago. While that level of inflation seems unfathomable for the Western world, monthly inflation in Argentina has not been this low since November 2021, according to government officials at the Instituto Nacional de Estadística y Censos (INDEC). For a country that has gone through literal hyperinflation, this is a great accomplishment. 

• Argentina's central bank, Banco Central de la República Argentina (BCRA), has lowered the interest rate from 133 percent in December 2023 to 33 percent in December 2024. While this is still among the highest in the world, this move on BCRA's part will lower costs of borrowing money ought to increase investment, consumer spending, and job creation. 
•  Fitch Ratings upgraded Argentina's credit rating to "CCC" last month because of an ability to pay foreign-currency bond payments without issue. 
• Argentina's Emerging Market Bond Index (EMBI), which is JPMorgan's index for measuring debt risk, dropped to a five-year low in October. 
• December 16, 2024 Addendum: I had to add this because this milestone made me excited: Argentina's economy exited a severe recession in the third quarter of this year. 
• If Gallup polling that came out this week is indicative of anything, it is that Argentineans are more hopeful of the state of the economy. 

Postscript. Not everything has been smooth sailing for Milei. In addition to such political obstacles as trade unions and Peronist politicians who prefer the status quo, there has been an increase of the poverty rate, which has reached over 50 percent under Milei. This could very well be part of the short-term pain the Argentineans have to endure to untangle the disaster of Peronist economic policy. If the calculations from the Universidad Católica Argentina are correct, then the poverty in Argentina is already decreasing (see below). [1/11/25 Addendum: Poverty in Argentina in the fourth quarter fell to to 36.8 percent].

Whether the citizens of Argentina can hang on long enough will have sway over the political feasibility over Milei's plans for the second year. Hopefully for Argentina, Trump's political affinity with Milei could accelerate negotiations with the International Monetary Fund and result in a more generous support package, thereby making the short-term poverty spike more tolerable.

That being said, I think it has been a good first year for Argentina. Milei inherited rampant government debt, a high poverty rate, and an annual inflation rate exceeding 200 percent. Milei is getting a handle on government spending, which was one of his major campaign promises. Improved monetary and fiscal policy have lowered inflation, at least by standards in recent Argentinean history. In spite of the increased poverty, wages are beginning to rebound and Milei still remains popular in Argentina. 

Would I like to see Milei do something about dollarization or capital controls? Yes. Furthermore, it is also true that Argentina's tariff rates and overall taxation rate remain high, not to mention Milei being unable to privatize any of the state-owned businesses. It will be more difficult for Milei to achieve his plans for Argentina to become an economic powerhouse once more if he does not address some of these fundamentals soon. But I also know that Rome was not built in a day and that we should not make perfect the enemy of good. I think that if Milei is able to stay on course, 2025 will look even better for Argentina than 2024. If successful, he can provide a mighty case study for how much of a positive impact deregulation, lower taxes, and less government can have on millions of lives. 

¡Viva la libertad, carajo!

Why Free Trade Is Good for National Security

One of the aspects that has made the United States a prosperous nation was its embrace of freer trade. In spite of becoming an economic powerhouse, the question of national security has been intertwined with free trade. Even Adam Smith recognized that national security could arguably be an exception to the free trade norm. 

Those who advocate for these protectionist or neo-mercantilist policies on the national security argument assume that we as a nation should have economic independence and self-sufficiency. This self-sufficiency, which is known as autarky, would allow us to have necessary supplies to fight or keep the economy going in the event of wartime. If autarky was such an easy and viable option during wartime, then blockades would be pointless. Yet blockades are an effective military and economic tactic precisely because that economic self-sufficiency is not feasible in practice. Tangentially, this zero-sum mentality explains why economic nationalists erroneously worry about trade deficits.

But I digress because I have to question the dichotomy between free trade and national security. It is instances such as these that make me feel despairingly about national security becoming a guise for such subpar economic policy as tariffs. But maybe I should not despair. This research paper from the American Institute for Economic Research (AIER), entitled A Free, Prosperous and Secure America, made me think that trade and national security are not such rivals. 

Much like with the "environment versus economy" argument, the two do not need to be at war with one another (pun intended). Rather, freer trade could improve national security. The AIER paper makes two arguments. One, enhancing economic growth allows the United States to resource its national security needs effectively. Second, it facilitates (but does not guarantee) more peaceful relations between other nations. While I was reading the AIER paper, I came across a research paper from the American Security project highlights five benefits of free trade to national security (Day, 2014): 

1. Signaling commitment to allies: Not only does the free trade with the country show a favorable relationship, but that it symbolizes commitment. While free trade agreements are not perfect, they are still better than having soldiers in another country. 

2. Secure access to military technology: By using comparative advantage, militaries can keep production costs low and within budget. Free trade also helps ensure a diverse, stabler market in case a certain region experiences instability. Contrary to what nationalists believe, renationalizing international supply chains does not increase a country's resilience in the wake of severe disruptions (e.g., Bonadio et al., 2020).

3. Promoting global stability: As we have seen during the Great Depression, the oil crisis in the 1970s, and the 2007-08 global financial meltdown, not working together economically causes more instability. As I am fond of saying, "Those who trade together stay together." Why? Because with established economic ties and cross-border investment, they are less likely to metaphorically shoot themselves in the foot by going to war. This article from Law & Liberty highlights the "substantial empirical evidence indicating that growing trade between nations lowers the odds of serious military conflicts with other countries." 

4. Setting a free trade precedent: The ball really got rolling after World War II with the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade (GATT). Setting this precedent will allow for more stable and predictable trade relations and investment opportunities, which also stabilizes national security. 

5. Enhanced global influence. In the 21st century, we measure power by military strength (hard power) as much as we do economic prowess, the latter of which is a form of soft power. Whether it is economic, social, or cultural in nature, soft power lends international legitimacy to a country. As developing countries continue to economically develop, the United States contributing with soft power can develop more stable relations, thereby solidifying the country's national security for decades to come. 

Example to Counter Protectionism. I could select multiple examples, but I will select President Trump using Section 232 to impose tariffs on steel. I criticized the tariffs in 2017 because there was no national security rationale and I was right to criticize the tariffs. It turns out that the Section 232 steel tariffs have done a bad enough of a job that raw steel production sank to a level lower than when the tariffs were imposed. In the meantime, the numerous amount of goods and services that require steel have gotten more expensive thanks to Trump's tariffs. I pointed out this past May how Trump's steel tariffs lowered export growth, decreased the GDP, caused a net loss of 75,000 jobs, and increased consumer prices because U.S. consumers were the ones who paid the price for Trump's folly. This example serves to show the overall trend of how protectionism harms the economy while doing nothing positive for national security (or even harming national security).

Conclusion. Since the days of ancient Greece, there has been government interference in trade policy. There are certain countries that are not going to play nice or adhere to the standards set in international relations, as is the case with China. Geopolitical rivalries do exist and there are times in which at least some benefits of trade have to be traded off for national security considerations. As this article from Econlib shows, many of those arguments are flimsy and tenuous. 

As such, it is generally true that freer trade is better for national security. It is a benefit of free trade we can add to the list of benefits along with the economic arguments, moral arguments and social welfare arguments. While I do not see either presidential candidate or either major political party in the United States clamoring for freer trade, I do hope that we get ourselves out of this protectionist rut so that we can implement international trade policy that is both good for the economy and national security. 

Reflecting on the Moral Case for Globalization

For President Donald Trump, it is about "Make America Great Again." French politician Marine Le-Pen believes that there is not a "Left or Right", but that the real fight is between "patriots and the globalists." For these nationalistic politicians, there is an intention to malign globalism by maligning the globalist elitists and making those who are opposed to them do not care about their nation's citizens. It is the "us versus them" and zero-sum mentalities that make up the mindset of the more nationalistic and protectionist elements in the Western world's politic. 

This theme and reality came up when I was reading a Cato Institute essay that was published last week: The Moral Case for Globalization. I enjoyed reading the essay because it acted as a reminder of why I am in support of freer trade, borders, and expression of ideas. But first, a definition of what globalization is. As the essay's author, Cato Institute scholar Tom Palmer, explains, "Globalization is the relatively free movement of people, things, money, and ideas across national or political borders." Greater globalization means reducing or removing state-enforced restrictions on these voluntary exchanges. Ultimately, "a consequence of increasing globalization is an increasingly integrated and complex global system of production and exchange." 

The principles of exchange for mutual advantage are vital for liberty. As Palmer points out, "There is evidence that our commonly accepted norms of morality emerge from trade, which established the importance of legitimate expectations and reputations, both of which are necessary fort he emergence of law and morality. Morality itself is a product of exchange, and the more trade, generally the more humane a society is." 

There is also a consequentialist argument the author makes, mainly that reducing barriers to trade, travel, and other forms of exchange across borders "have been spectacularly positive for the world's poor, as wages have increased, jobs have become safer, and the use of children for labor has plummeted. Increasing wealth, in turn, is strongly connected to improving health, and the global spread of improvements in medicines and technologies has improved health outcomes even in regions that have not participated as much in the exchange of goods." Earlier this month, I wrote about how more free trade results in reduced poverty domestically and internationally, so this does not surprise me. 

There are other benefits that Palmer mentions, including greater ability to preserve other cultures and traditions, as well as greater reduction in war democracy and peace become more salient norms. To echo the author's conclusion, "The world is better when barriers to free and voluntary cooperation are reduced. The world is better because of globalization." It is difficult not to come to this conclusion after reviewing the data across multiple topics. 

My 1,000th blog entry was dedicated to why I am libertarian from ethical and consequentialist lenses, which includes the importance of globalization. Allowing more people to be freer, healthier, happier, and more prosperous seems like a noble goal, which is why advocating for removing those barriers that stifle voluntary and mutually beneficial exchange has been a major theme of this blog. For more information on the benefits of globalization, you can view the video from John Stossel released earlier this month debunking globalization myths or you can read the list of selected essays below. 

• The Case for Globalism (American Enterprise Institute)
• Defending Globalization (American Institute for Economic Research)
• Food Globalization Puts Food on Your Plate (Cato Institute)
• Globalization: A Race to the Bottom or the Top? (Cato Institute)
• Globalization Creates a Global Neighborhood, Benefiting All (Cato Institute)
• The Globalization of Ideas Enriches the World (Cato Institute)
• Globalization: A Tinfoil Hat-Free Critique (Foundation for Economic Education)
• In Praise of Capitalist Globalization (Foundation for Economic Education)
• In Defense of Globalization (International Monetary Fund)

How Free Trade and Trade Liberalization Help Out the Poor Domestically and Globally

Last month, the White House released its annual Economic Report of the President. In the report, there was a chapter on International Trade (Ch. 5, p. 173). One of the interesting admissions in the report is how trade with China has improved the purchasing power, especially of lower-income Americans (p. 203). As a matter of fact, the report calculated that 68 percent of those benefits went to low-income Americans. This finding is echoed in a report from the Federal Reserve Bank of Minneapolis that was released just last week (Horwich, 2024).

The author of the Minneapolis Fed report, Jeff Horwich, says that much of the research of international trade on consumer welfare looks at the effects on a national level. Rarely is it done to see the effects of a certain demographic, such as the poor. Even so, the fact that international trade helps out low-income households both in the United States and globally does not surprise me in the least. Why is this the case? How does international trade help out the poor specifically? 

Improved quality of life with greater imports. As this article from the Houston Chrolinc brings up, it can be cheaper for a country to import goods or services than it can be to produce them. To quote the Australian Department of Foreign Affairs and Trade (DFAT), "trade expands the markets local producers can access, allowing them to produce at a more efficient scale to keep down costs." This ensures a constant flow of more goods, which can improve the quality of life and give options they otherwise would not have. 

Lower prices lead to greater purchasing power. To quote the International Monetary Fund (IMF) from 2001: "Trade liberalization helps the poor in the same way it helps most others, by lowering prices of imports and keeping prices of substitutes for imported goods low, thus increasing people's real incomes...An open trade regime also permits imports of technologies and processes that can help the poor." 

I was first criticizing Trump's obsession with tariffs in March 2016, which was before he was president. I pointed out that tariffs decreased economic welfare. Conversely, countries with fewer trade barriers had less poverty. To quote DFAT, "Removing tariffs on imports gives consumers access to cheaper products, increasing their purchasing power and living standards, and gives producers access to cheaper inputs, boosting their competitiveness by reducing their production costs."

Free trade improves innovation and efficiency. The Mercatus Center mentions a good point in its brief on the benefits of free trade: "Over time, free trade works with other market processes to shift workers and resources to more productive uses, allowing more efficient industries to thrive. The results are higher wages, investment in such things as infrastructure, and a more dynamic economy that continues to create new jobs and opportunities." Those wage increases help out the poor, as well. 

Postscript. As a 2015 report from the World Trade Organization illustrates, free trade creates new job opportunities for the poor, raises the real wages of unskilled labor, lowers prices of goods consumed by the poor (which means greater purchasing power), and improves access to external markets for the goods that the poor consume. All of these phenomenon aggregately improve the quality of life for the poor. 

Freer trade is vital for the poor because, as the World Economic Forum states, "Open trade is particularly beneficial to the poor, because it reduces the cost of what they buy and raises the price of what they sell." Farmers and manufacturers especially can reach a wider market when there is open trade (ibid.). As the World Bank has brought up, free trade has lifted over a billion people of poverty. The Heritage Foundation, amongst many others, has shown how greater economic freedom creates greater economic growth while lowering poverty (see below). This is a truth I detailed when showing how trade liberalization does a much better job than foreign aid at alleviating poverty. 

With the overwhelming evidence in favor of greater international trade, it does beg a question for the upcoming presidential elections. If the relatively lower tariffs from Trump's previous administration made items more expensive and made Americans poorer, what will Trump's proposed universal 10 percent tariff or 60 percent tariff on China will do to the poor both in the United States and abroad? This November's election is between a Republican whose tariffs will make Americans poorer and Bidenomics that has increased inflation in a way that has made life more expensive for the poor. And let's not forget that Biden has maintained many of Trump's tariffs. While it is clear that free trade helps out those in low-income households, it is also clear that we are in an age of protectionism, regardless of who gets elected this November. It is the everyday citizen, especially the poorer ones, that suffer because politicians on both sides of the political aisle ignore the fundamentals about the benefits of free trade.

Deregulation Hasn't Really Been a Road Taken for Argentina, But Milei's Efforts to Do So Are the Right Path

Even before Javier Milei was elected, numerous media outlets have vilified Milei. At the Financial Times, he is a radical right-winger. For the Left-leaning organization Fairness and Accuracy in Reporting (FAIR), Milei is deemed "really as extreme as you get in right-wing libertarian ideas." One article in Forbes designated him a destroyer. France 24 labels him an "anarcho-capitalist." After reading these articles, it would not shock me if these journalists read my blog and similarly lobbed ad hominem attacks at me. 

It is not like Milei is an uneducated idiot. Milei was an economics professor for 20 years and wrote more than 50 academic papers. He was also a chief economist at Máxima AFJP and a senior economist at HSBC Argentina. His style and delivery are more Trump-esque in nature, as is illustrated by Milei using a chainsaw to illustrate how he would cut inflation if elected. However, his policy views widely diverge from Trump. Trump is a nationalist and protectionist who limited immigration and free trade during his four years in office. Milei is a minarchist (i.e., advocates for minimal government) while being influenced by the Austrian school of economics. He certainly has no love for Argentina's central bank. 

Last week, Milei sent an omnibus law to the National Congress of Argentina entitled Bases y puntos de partida para la libertad de argentinos (Translation: Basic Law and Starting Points for the Freedom of Argentinians). Admittedly, I have not read the bill yet, but you can view the 183-page bill here if you want to read it. What I can gather is that it entails much deregulation, ranging from the airlines industry and protectionist measures of industries to end price controls and the prohibition on exports. A plurality of these regulations were implemented under the dictator Juan Carlos Ongangía, which says a lot.

The truth of the matter is that Argentina's economy is in disarray, something which I wrote about in 2014 and 2019. The Heritage Foundation's Index of Economic Freedom has Argentina ranked 144 out of 176. Aside from the political interference and poorly functioning judicial system, Argentina ranks so low because it has lots of fiscal spending, price controls, capital controls, and has other regulations to discourage entrepreneurship. 

The Cato Institute's Human Freedom Index is no less flattering. This Index looks at both personal freedom and economic freedom. At least for personal freedom, Argentina ranks 38 out of 165, although it would be nice to see improvement in rule of law. This finding on personal freedom lines up with Freedom House's Freedom of the World Index, which fortunately ranks Argentina as "Free" in terms of political and civil liberties. As for economic freedom, we see below that Cato Institute's Index ranks Argentina as one of the most regulated countries in the world. 

As the adage goes, "desperate times call for desperate measures." Milei was right to declare a decree of necessity and urgency (Decreto de necesidad y urgencia, DNU) on December 20, 2023. Years of regulations, increased government spending, and printing pesos as if money grew on trees has caught up with Argentina. My theory is that mainstream media outlets are so keen on lambasting Milei because his election and pending reforms undermine the idea that "government knows what is best." 

I doubt that I would agree with literally every single one of Milei's proposals. As ideologically similar as I am to him, it is not possible to agree with someone on everything. As happy as I am that Argentina has elected a libertarian president, I am not going to automatically agree with simply because it is Milei's proposal. I will base any policy analysis on the merits of the argument or policy itself, much like I already have with Milei's proposal to dollarize Argentina or being perplexed as to why Milei would raise taxes on grain. I will say that based on what I have seen, Milei is by and large on the right path. 

With opposition controlling the majority of the Argentinian Congress, it begs the question of how likely Milei's reforms will pass. However, if successful, I would wager that freer trade, fewer regulations, and less profligate government spending will help make Argentina the economic powerhouse that it once was prior to Juan Perón.

Are Biden's Tariff-Rate Quotas on European Steel an Improvement Over Trump's Steel Tariffs?

One of the most irritating parts about the Trump presidency and his attempt to "Make America Great Again" was his protectionism. Trump's favorite weapon of choice in his attempts to restrict imports from other countries was the tariff. The tariff that had considerable impact was when he made the decision in March 2018 to implement a 25 percent tariff on steel. This tariff was not only placed on China, but also on U.S. allies in Europe. Trump's argument for the tariffs was that he was helping out the U.S. manufacturing industry. When I criticized Trump's steel tariff, I pointed out how it would cause net job loss, increase prices for the U.S. consumer for multiple goods, create negative macroeconomic effects, increase the likelihood of trade wars, and do next to nothing to prevent the decline in U.S. manufacturing that Trump was trying to minimize. A year later, I illustrated how the results of Trump's tariffs aligned with economic theory. In other words, in spite of Trump's assertion that we would be doing so much winning, the American economy and the American people did anything but win as a result of his tariffs. 

Given how evident the damage caused by Trump's tariffs, I was hoping that Biden would have done the simple, yet effective policy reversal by eliminating Trump's tariffs. Instead of reducing the tariff rate to 0 percent, Biden made a different agreement with the European Union: a tariff-rate quota (TRQ) system on steel and aluminum. The TRQ acts as a hybrid between a tariff and an import quota. To clarify the trade jargon here, a tariff is a tax imposed on imports entering a country. An import quota is a limit of a quantity of a certain good that can enter the country. In the case of a TRQ, anything below the threshold is either taxed at a reduced rate or is duty-free. If the quantity of imports exceeds the agreed-upon threshold, then a larger tax is imposed on the goods that surpass that threshold. Essentially, a TRQ is a two-tier tariff system. To get a summary of the economics of TRQs, you can read what the U.S. Department of Agriculture (USDA) published here.

Here is how Biden's latest TRQ works. As of January 1, 2022, a TRQ on steel and aluminum coming in from the European Union went into effect. The Trump-era tariffs for steel imported from other countries still remains in effect. Under this TRQ, the annual import volume on steel from Europe is 3.3 million metric tons (MMT). The TRQs are based on a first-come, first-serve system. The first 3.3 MMT of steel that enters the United States from the European Union will not be subject to tariffs. If the imports exceed the 3.3 MMT quota, any subsequent steel imports will be walloped with the 25 percent tariffs. 

The question to ask ourselves is whether Biden's TRQ was an acceptable trade policy choice. As we see from the chart provided by the USDA report below, much of the answer to that question will depend on whether steel imports are high enough to make the quota binding or not. I worry for a few reasons that steel imports would exceed the quota. One, European countries will be incentivized to import steel earlier than later so they can get the discounted rate. Two, steel import data show that the annual average imported from 2017 to 2019 would have rendered this quota binding. Three, the American Iron and Steel Institute found that U.S. steel imports increased 44.6 percent from November 2020 to November 2021. Four, the World Steel Association projects that steel demand is only to increase through 2022. 

Steel industry trends combined with economic incentive signal that 2022 steel imports would most probably exceed the limit in the TRQ. What we cannot know at this time is by how much. Even so, we know based on previous tariffs that any of the imports beyond the quota will be subject to the 25 percent tariffs. In theory, Biden's TRQ sounds like an improvement over the Trump's policy because it would mean fewer goods subject to high tariffs. It also reduced trade tensions between the United States and the European Union, as well as remove previously existing forms of EU tariff retaliation. However, I take issue with Biden's TRQ for a number of reasons.

1. The tariffs under Section 232 were intended for exigent national security reasons. While Trump had spurious reasoning for his usage of Section 232, Biden is not even hiding his reasoning for the reckless usage of Section 232: climate change.
2. Speaking of flaunting certain violation of norms, Biden's TRQ violates the World Trade Organization (WTO) rules. More specifically, the most favored nation (MFN) principle in WTO agreements states that if a member reduces export restrictions on one country, it has to do so for all countries. If some of the most prominent members of the WTO cannot follow its own rules, it undermines the validity of the WTO.
3. This violation of WTO norms not only has the potential to harm relations with other such countries as the United Kingdom, Japan, and South Korea. Biden kept the Section 232 tariffs on these allies because he claimed that the tariffs are good for national security. If we extended the same deal (or even a better deal) to these nations, we could also help ease the bottleneck in our supply chains.    
4. There are 54 distinct quotas, which means more enforcement and red tape. The complexities within the quota score-keeping mean more politicking and more rent-seeking. This will also make it more difficult for domestic producers who rely on imported steel and aluminum inputs to find what works best for their business. Larger steel- and aluminum-using domestic firms will be at an advantage because they will have the manpower to navigate the paperwork and the bureaucracy to get the import quota rights. 
• As economist Anne Krueger makes clear, "Because they [European firms] will not have to sell more cheaply to offset what used to be 25 percent, they can instead raise their prices on their exports within the quota quantity." What was once tariff revenue for the U.S. government is now revenue for European producers of steel and aluminum. Larger steel- and aluminum-using domestic producers will also be in a better position to seek financial relief (much like we saw in the Trump administration), which means an erosion of competitiveness and productivity growth throughout multiple markets. 
5. Supply and demand are changing constantly. There is no bureaucrat who has the clairvoyance to predict how the markets are going to play out and which quota would be acceptable. As domestic demand increases, the percent of foreign steel as a share of the market increases. Given that the quotas set are below average of import levels from 2017-2019 and demand is projected to increase, the quotas currently in place will most probably be restrictive in terms of growth for the multiple industries with steel as an input.  
6. As the Coalition of American Metal Manufacturers points out, U.S. steel-using manufacturers are losing business to competitors in other countries because the protectionism does not allow them to have access to the raw materials necessary to stay competitive in the global market. While limiting supply and driving up prices helps domestic steelmakers, it hurts downstream producers that use steel as an input, which ultimately hurts U.S. consumers. 
7. A TRQ is definitionally a two-tier tariff system. As such, one does not get rid of all the costs of tariffs by switching it with a TRQ. Even with the best implementation, one merely minimizes the distortionary, negative effects of tariffs (see here, here, and here for my past analysis on the harm of tariffs). Whether we are talking about tariffs, import quotas, or tariff-rate quotas, they all distort the competitive market for the worst. 

Conclusion: I did not think it would be possible for a president to do a comparable amount of damage to trade as Trump did, but then along came Biden. What the net effects of the TRQs are still unknown because it depends on how well implementation goes. While Biden's move solved some problems with the TRQ, it also caused others. Biden could have simply removed the tariffs and allowed free trade to flourish. Instead, he opted for a more convoluted form of protectionism entangled with bureaucracy and red tape. Whether it was Trump's misguided attempt to punish foreign nations or a misguided attempt at climate change policy, it is ultimately U.S. consumers and downstream manufacturers that pay the price for this nonsensical trade policy. One thing has been made abundantly clear in recent U.S. trade policy: neither the Republican Party nor the Democratic Party presently care to help out the American people by making trade freer.

The U.S. Postal Service Was Screwed Before Coronavirus: The Latest GAO Report and a Need for Postal Privatization

When the Post Office was enumerated in the Constitution (Article I, Section 8, Clause 7), it is understandable why it would merit constitutional protection. Being able to communicate across the country was difficult for much of U.S. history. The telegraph and telephone helped advance communications in the U.S., but there was still a place for the postal service. Once the digital age set in and the Internet became ubiquitous, the U.S. Postal Service (USPS) has become increasingly irrelevant and unsustainable.

The Government Accountability Office (GAO) report that was released last week provides just how irrelevant and unsustainable the USPS is. And to think I'm saying that as someone whose grandfather worked at the USPS for most of his adult life! The title of the report, "Congressional Action Is Essential to Enable a Sustainable Business Model," says a lot. Why does it not have a sustainable business model in the first place? The GAO report found that the USPS lost $78 billion from 2007 to 2019. As the GAO figure below shows, the main driver of said debt is workers' benefits, whether in the form of unfunded liabilities for retirement benefits, unfunded liabilities for health benefits, or workers' compensation.

The other major challenge that USPS faces is declining mail volumes. First-class mail has declined 44 percent from its 2006 peak (GAO, p. 8-9). As the Cato Institute points out in its 2019 analysis of the post office (see chart below), mail has declined substantially. What makes that more upsetting is that most of the items being delivered by the USPS is marketing mail. Junk mail and debt are the USPS' main contributions to society. Imagine that!

I have previously analyzed the USPS in 2017 and in 2011, so it's no surprise where I land on this topic. As a recap both of this blog entry and to provide a summary of past blog entries, labor costs are too high. The USPS is a tax-exempt entity with monopolistic power in first-class and standard mail, and it still cannot create a net profit. Delivery routes plateau and Saturday service remains while mail volume declines. The price of stamps went up 10 percent in 2019, but the gap between revenue and expenses widened. There is a reluctance to close post offices, in spite of the notable decline of foot traffic. Most of the USPS' deliveries are junk mail. The divergence between mail delivered and number of employees is notable and close to eye-popping.

It is true that the pandemic is putting pressure on the USPS. COVID-19 and the subsequent lockdowns have caused a decline in mail volume, as well as generating a net operation loss. This is why the Democrats are seeking $25 billion to revive the USPS. Conversely, what we see is that these trends predate the pandemic by years. As Cato Institute expert Chris Edwards brings up in his 2019 testimony to Congress on the subject, we need to work towards postal service privatization. Germany's Deutsche Post, the Dutch PostNL, Japan Post, CTT Correios de Portugal, and the United Kingdom's Royal Mail have all gone the privatization route. Sweden and New Zealand have put their postal systems in corporate form. It is clear that relying on the USPS to contain costs while demand for its services (save package delivery) is on the decline is too much to ask since neither the USPS nor Congress can provide the flexibility required to reform the USPS. Ultimately, introducing privatization and greater competitive forces will be the best way to make the postal service vibrant and sustainable.

Reflecting on My 1,000th Blog Entry and Why I'm Still a Libertarian, Pandemic or Not

I can't believe it, but this is the 1,000th piece I have written for Libertarian Jew. Assuming that I spent an average of two hours on each blog entry, that would mean that I have spent over an entire month of my life blogging. I reflect back on why I started writing this blog in the first place. During my young adult years, I was staunchly conservative. What drew me close to conservatism in college were the ideas of individual freedom, limited government, lower taxes, personal responsibility, and fiscal discipline from the government. I found camaraderie amongst my conservative friends during college (although a lot of them turned out to be libertarian like me). I developed a love and appreciation for what conservatism was supposed to stand for.

That started to change in 2009 when I started to re-examine some of my firmly-held conservative beliefs. The first one was my stance on same-sex marriage. Certainly at that time, the standard right-wing belief was to be against same-sex marriage. I held that belief mostly because of influence from family and friends. I asked myself if conservatives believe in individual freedom, how can one deny a union between consenting adults or right to contract? It didn't make sense to me anymore.

Afterwards, I questioned my beliefs in criminalizing marijuana and restricting immigration to the U.S. I also scrutinized my views about the wars that the U.S. was fighting. Not only did those wars drive up the federal budget deficit, but the government limited individual freedom with the Patriot Act and the creation of the Transportation Security Administration (TSA). During this stage of my life, I was reading a lot of Milton Friedman, Frederich Hayek, and Frédéric Bastiat, which is a reading list that heavily points towards classical liberalism. I realized that conservatism was not an accurate reflection of my values. Individual freedom, limited government, lower taxes, and personal responsibility are ideas much more consistently and better represented in libertarianism.

Once I abandoned conservatism for libertarianism, I started writing this blog. My earlier pieces were more political commentary than anything else, although I did occasionally blog on my recently founded religion of Judaism as a way to explore various practices and rituals of the Jewish religion. During my graduate school program in public policy, my blog shifted from commentary to analysis. It became a place to scrutinize and analyze my own views. Libertarian Jew was a way for me to develop and ultimately solidify why I am a libertarian. It also provided me a modest way to educate others about libertarianism, which is why I thank you, the reader, for taking the time over the years (or however long you have read my blog) for being part of my readership.

This leads to a question I have been giving a lot of thought lately. Why be libertarian at all? What do I find so appealing about libertarianism that I remain libertarian over a decade later? There are multiple types of libertarianism, and I am not going to speak for all libertarians. That being said, I would like to divide my personal reasoning for being libertarian into two categories: a values-based argument and an outcomes-based argument revolving around consequential libertarianism.

My Values-Based Reasons for Being Libertarian

1. I love liberty. "Life, liberty, and pursuit of happiness" is a good way to sum it up. On a personal level, I feel that as long as I am not harming anyone, I should have the freedom to spend my money how I want, practice whatever religion I would like, marry whatever consenting adult I choose, associate with whomever I would like, and consume what I want. That is the premise behind the non-aggression axiom. I feel that way not only on an individual level, but a societal one. Without free will, ethics become meaningless. We are responsible for our choices, both good and bad. Plus, the freedom to pursue your goals and live life on your own terms is exhilarating. 
2. Respect of other individuals, autonomy, and personal responsibility. Libertarians view the individual as the basic unit of social analysis. Libertarianism doesn't view things in terms of communal or group rights, but rather individual rights. It doesn't matter if you are straight, gay, bisexual, or have another sexual orientation. I don't care if you are Democrat, Republican, or independent. You could be Jewish, Christian, Muslim, atheist, agnostic, or identify with another religion. The point is that regardless of who you are, libertarianism cares about the dignity of the individual. That entails both individual rights and responsibilities. My rights end where your rights begin, and you take ownership of your decisions, good or bad. Being able to extend this respect and dignity beyond white males in power, whether we are talking about women, African-Americans, those of minority religions or sexual orientations, or other disenfranchised individuals, has been one of the greatest libertarian triumphs in history. 
3. Limited government and rule of law. Libertarianism is not hedonism. Per the non-agression axiom, individuals are able to pursue their interests and live their lives as long as they respect others. To protect an individual's rights, individuals formed governments. At the same time, government can be a dangerous institution because of the power it wields.  I, along with most libertarians, believe in limited government. This means that I believe that there are certain roles that the government ought to play. However, too much concentrated government power is the best way to strip one of individual rights. History books are replete of examples of where government is the worst abuser of individual rights, whether they be Mao Zedong, Adolph Hitler, Queen Isabella and King Ferdinand, Benito Mussolini, Fidel Castro, or Augusto Pinochet. As Lord Acton said, "Power corrupts, and absolute power corrupts absolutely."
4. Tolerance and diversity. These are expected outcomes of a pluralistic, multicultural society that respects individual rights. Libertarianism demands that we mind our own business, even when we would rather not. It imposes a minimalist level of morality of "do not do unto others as you would want done unto you," also known as the non-agression axiom. It is about establishing a basic framework of rules so that people can pursue their lives as freely as possible. Tolerance is not acceptance. Some might live a religious lifestyle while others live a secular one. Some will be wicked, others virtuous. Most people are somewhere in between virtuous and righteous I don't have to agree with your beliefs or life choices to get along with you. As long as you live in peace and respect another's individuality and rights, that's what counts. As a side note, libertarianism has provided me with the openness to get along with people who are different than me, and as a result, makes for a richer life experience.  

My Outcomes-Based Reasons for Being Libertarian
As much I hold to the aforementioned values, I find they are an incomplete description as to why I am libertarian. I recognize that people can have wildly divergent views, values, and opinions. I also recognize that values are more subjective, although the more minimalist values of respect for others (e.g., don't murder, don't steal) are more universal in nature. I respect freedom, but others might not. That is why I ultimately define myself as a consequentialist libertarian. Essentially, I hold to consequential libertarianism because I find that limited government and a liberalized, market-based economy work best.

Obviously, what constitutes the "best" or metrics involved varies from topic to topic. If you are looking for topic-specific examples, my blog provides a myriad of examples. Both markets and governments have failures. A market-based system and a government-based system both have human actors, which makes the process definitionally fallible. However, when accounting for each and comparing market failures to government failures, I heavily favor markets over governments because in the vast majority of instances, a market-based policy outperforms a government-based one. As Nobel Prize-winning economist Gary Becker points out, "On the whole, government failure is far more pervasive, damaging, and less self-correcting, than is market failure."

I advocate for capitalism because it works. One could counter me by saying that if communism worked well, I could become an advocate for communism. Holding a consequentialist view of public policy, that is theoretically possible. Here's the catch with that criticism: Anything can work in theory because you could manipulate the hypotheticals to say whatever you like. In practice, communism failed, plain and simple. Communism has not been around for that long, and yet it caused so much misery and the deaths of millions. Socialism has also failed, but the magnitude of the failure is not that of communism.

As I explain in my debunking about myths on capitalism, allowing for freer trade, greater foreign investment, and market liberalization has given us a quality of life that no government policy has. There is no political or economic system that can hold a candle to the amount of poverty alleviation or improvements in life that a market-based system has provided. On the other hand, government policy and regulation is by and large stifling; it does more harm than good.

The harm of government regulation has proven itself to be especially true during the COVID-19 pandemic. Earlier this month, I came up with a list of 15 major government regulations that made us more vulnerable as a result. If it were not for these regulations, we would have had a better handle on COVID-19, and more lives would have been spared. Much like they did in the Great Recession, lavish unemployment benefits are most likely going to create prolonged unemployment. Trump's ban on green cards is going to make economic recovery more difficult. This only covers the topics I have recently blogged about. I'm sure that by enacting rushed legislation in a middle of a crisis, the other provisions of COVID-related legislation are going to have unintended consequences that are going to reverberate well beyond the pandemic.

When I say "let the private sector" fight the pandemic, what do I mean? The private sector is not some abstract or amorphous blob. It is a network of private actors (e.g., individuals, businesses) using spontaneous order to fix problems. It is doctors, nurses, and other healthcare professionals treating patients. It is grocery store staff working diligently to make sure that our store shelves are stacked with items we need. It is the researchers who are going at it day and night to find treatments and a possible vaccine. It is the truck drivers working overtime to transport goods. It is the manufacturers who, in spite of FDA regulations, will manufacture ventilators, masks, and hospital beds to deal with the influx in demand for medical goods and services. While the government has a role to play in mitigating the spread of COVID-19, its main role should be to get out of the way and remove the regulations that have made our response to fighting the pandemic all the more difficult.

All of this goes to why I remain libertarian. Not only is libertarianism a reflection of my values, but it is what brings the greatest amount of utility (life satisfaction) to people. Capitalism, justifiable skepticism of government intervention, deregulation, and respect for individuals are good values and mores to hold to, regardless of whether we are in a pandemic or not.

50 Years After Moon Landing: A Call for Even Greater Privatization in the Global Space Market

"That's one small step for man, one giant leap for mankind." Those words were uttered by Neil Armstrong fifty years ago on July 20, 1969 when he became the first person to land on the Moon. It was a great day for the United States not only because of what it meant for technological innovation, but it also meant that the United States now had a considerable advantage in the Space Race with the former Soviet Union. This anniversary made me realize something else: we have not been on the Moon since. It is not as if NASA hasn't done anything for fifty years. NASA has had 111 manned missions between 1981 and 2011. There have been space stations since 1969. We even had a rover on the planet Mars. And I'm sure that NASA has conducted research that has resulted in the advancement of space travel and exploration. While there have been accomplishments at NASA since 1969, I would argue that none was as iconic as the Moon Landing. It got me to think of the space exploration market now.

Before I continue, I admit that I am not well-versed in the history or public policy behind aeronautics. I have friends who either work at NASA or have degrees in aerospace engineering, and when it comes to topical expertise on the subject, I would defer to them. At the same time, I would like to take my functional expertise in public policy and market research to examine the global space market to see how NASA and the private space exploration market have been faring.

NASA Budgetary Spending Since the 1960s
Below is a chart of NASA budgetary spending in inflation-adjusted dollars since its founding at the end of 1958. As part of the Space Race, NASA spending increased substantially in the early 1960s, peaked at $34B (in current dollars). It declined to $22.7B (in current dollars) by the year 1969, which is close to the amount that NASA currently has allotted for its budget.  I bring this up in the first place is that I anticipate a counterargument of "We haven't made it to the Moon since 1969 because we didn't invest in NASA like we did in the 1960s." I will address this point momentarily, but first....

Source: Center for Strategic and International Studies

Global Space Market
Looking at general spending on research and development, federal spending plateaued in 2008, whereas private research and development boomed (American Institute of Physics). More specific to space travel, I was surprised to see the market segmentation when it came to funding. In 2018, the global space market was worth $414.75B (Space Foundation). I was more interested to see that 79.3 percent was in the private sector.

Why Privatize the Global Space Market Further
For a number of years, NASA has acted as a de facto monopoly in the U.S. space market, particularly with space travel (not so much with satellites). Maybe it is not a bad thing that the market is shifting to the private sector.

When a single player dominates a market, whether in a strict market or simply has a high market share, there is little incentive to control costs or improve quality. This has been a motif in NASA's history. Let's take a look at the initial Apollo 11 mission that finally landed U.S. astronauts on the moon. As the Cato Institute points out, there were other Apollo missions that were cancelled, aborted, or simply did not make it to the Moon. The pattern continued with Skylab, a space station that only saw three missions before crashing to Earth in 1979.

If you need a more modern example, how about International Space Station? That Station was supposed to be completed in 2002 at the cost of $17B. It ended up costing $64B and was not complete until 2011. The Constellation Program and James Webb Space Telescope are two more examples. In terms of current debacles, the rockets that are supposed to get astronauts to the moon by 2024 are also dealing with delays and cost overruns, according to the Washington Post.

This is not to say that NASA has never succeeded at anything because the Apollo 11 Moon Landing is but one example of NASA's success. This is also not to say that the private sector is not prone to error. In a cost-benefit analysis, it would be about who does a better job. At the same time, NASA has a history of being over-budget and behind schedule.

In recent years, the private sector has made its way into the space marketplace, whether it is Amazon CEO Jeff Bezos, Tesla founder Elon Musk, or billionaire Richard Branson. While the U.S. government accounts for 11.6 percent of the market, its footprint is a shadow of its former self. The private sector has an incentive to invest in space travel on top of the incentive to create satellites (Embry-Riddle Aeronautical University). Moore's Law will only make barrier to entry lower and capital costs cheaper for those who wish to enter the space market.

In summation, NASA already recognized the importance of shifting space travel over to the private sector a while back. Experts in space travel also recognize this reality: that privatization is the wave of the future in this market, and that commercialization will be the way to see this market truly launch.