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Trade, Antitrust, and Restoring Domestic Competition

Will more restrictive trade policies harm the U.S. economy by shielding domestic businesses against competition? That’s what standard economic theory holds, insisting that pressure from foreign rivals is needed for U.S.-based businesses to continue to in­novate, to create the highest quality goods, and to sell them for the lowest possible prices. Although this theory has…

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Uber’s Path of Destruction

Since it began operations in 2010, Uber has grown to the point where it now collects over $45 billion in gross passenger revenue, and it has seized a major share of the urban car service market. But the widespread belief that it is a highly innovative and successful company has no basis in economic reality. An examination of Uber’s economics suggests that it has no hope of ever earning sustainable urban car service profits in competitive markets…

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Subscription Capitalism: The Story of a Power Shift

The emergence of the internet changed the business landscape in fundamental ways. Computer-based services could be offered to anyone irrespective of geographic restrictions. This meant that internet companies could become globally significant with relatively little initial investment, as demonstrated by Facebook, Google, and several others. Their ability to rapidly concentrate wealth with relatively little overhead…

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The Illusion of a “Marketplace of Ideas” and the Right to Truth

The traditional model of a “marketplace of ideas” was intended to justify freedom of speech in terms of its optimal outcome in the production of truth. But today our behavior on the internet, the main locus of the “marketplace of ideas,” is continuously monitored and processed through the analysis of big data. Complex algorithms categorize…

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Peter Thiel, Rachel Carson, and Regulatory Double Standards

Buried in the middle of a two-hour debate in 2014 on religion and modernity is a thought-provoking observation by Peter Thiel regarding technology and the modern economy. Instead of praising Silicon Valley for its tremendous digital inventiveness, Thiel criticized the technological advances of the last fifty years…

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“Getting Away with Murder”: Prescription Drug Coverage in America

Nine days before the presidential inauguration of Donald Trump, Vice President Elect Mike Pence strode to the press conference podium. He reviewed the transition team’s progress in nominating cabinet secretaries, but quickly turned his attention to the “concerted effort . . . to delegitimize this election and to demean our incoming administration.” Although pledging his…

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The Economics—and Politics—of Broadband

Today it is hardly possible to imagine an internet without its biggest players. Google’s market share in search is somewhere between 70 percent and 90 percent (depending on whether services like YouTube and Google Maps are included). Facebook has more than two billion active users. Netflix alone is responsible for more than a third of…

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Liberty versus Monopoly

Over the last half-century, business interests and philosophical libertarians have formed a powerful alliance. Business leaders frequently claim to be libertarians and draw on the rhetoric of the free market to criticize government regulation. In turn, libertarians frequently defend businesses against what both groups see as an overbearing regulatory state. The connection is best represented…

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Conservative Critiques of Capitalism

The 1984 Republican Party platform lauded what it called “democratic capitalism” for having produced, “in the United States and elsewhere, an unparalleled ability to achieve political and civil rights and long-term prosperity for ever-growing numbers of people.” In 2016, the GOP platform continued…

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Radical Markets versus Sensible Politics

Market-based reforms were used in the 1980s—really invented as a concept in the run-up to the 1980s—to counteract the excesses and failures of post–World War II social policy. At the time, marginal income tax rates in excess of 70 percent had shifteind income into unproductive tax-optimization vehicles instead of savings and investment. Excessive urban rent controls were a disincentive…

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