Category: reason

The Cato Unbound website is holding a symposium on the 50th anniversary of economist Albert O. Hirschman’s classic work, Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States. Contributors include Adam Thierer of the Mercatus Center (who wrote lead essay), sociologist Mikayla Novak, innovation theorist Max Borders, and myself.

Thierer’s lead essay emphasizes the ways in which technological innovation—particularly in the digital realm—has created important and valuable forms of exit rights that increase opportunity and constrain the authority of states. Novak uses Hirschman’s theory to analyze the Black Lives Matter movement as an exercise of voice. My own contribution accepts the validity of many of Thierer’s insights, but also emphasizes the importance of expanding exit rights in “real” as well as digital space. One part of the essay describes how the coronavirus crisis has revealed new opportunities for expanding remote work, but also highlighted the ways in which most people still need to live near their workplace and appear there in person in order to achieve anything close to full productivity. In addition, I discuss how the  criticize Hirschman’s famous argument that exit rights should sometimes be limited in order to avoid diminishing “voice.”

Here is an excerpt:

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It is safe to say that 2020 has not panned out in a way that most of us had hoped or expected. Nevertheless, the state of humanity and the world as a whole is, for the most part, much better and improving faster than most people think.

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A week ago, Tennessee’s Department of Education announced it was going to start conducting monthly “child well-being” assessments of every single kid under age 18 in the state. These could be by phone, email, or a knock on the door. On home visits, the so-called “well-being liaison” would be allowed to interview the children privately.

Did the state set any standards for what sort of person would be given kind of access and responsibility? Well, the liaisons had to be at least 20 years old, and they had to pass a background check.

That’s it.

The parental uproar that ensued, I’m happy to report, was immediate and deafening. By Friday, just three days after the initiative was announced, it had been withdrawn by Gov. Bill Lee (R) and the state’s education commissioner, Dr. Penny Schwinn.

“Although well-intentioned, we have missed the mark on communication and providing clarity around or role in supporting at-risk students during an unprecedented time,” Schwinn wrote in a letter to the state’s General Assembly. “Governor Lee has asked our department to remove this guidance and go back to the drawing board so we get it right. I want to assure you that we recognize the concerns that you and your constituents share.”

The concern seems to be pretty basic: How dare you come to my house and investigate me as if I’m a suspected child abuser?

“We were encouraging people to call the governor’s office and their elected officials,” Dan Beasley, staff attorney at the Home School Legal Defense Association (HSLDA), tells Reason. “Our data show that about 1,600 people responded directly to our action.” That seems to have done the trick.

The state’s initiative was created by the Child Wellbeing Task Force, a 38-member committee concerned that kids might be suffering behind closed doors, out of sight from teachers who might have noticed their distress and reported it to child protective services under different circumstances.

I can understand the worry: No one wants kids to be hurt or starved behind closed doors. The problem is that the state should not go around visiting people’s homes just because someone, somewhere, might be in trouble. As the HSLDA wrote in a note to its constituents, “such a policy, if adopted, would threaten the right of parents to be presumed to act in their own child’s best interests.”

Even Schwinn seemed to understand that. “I acknowledge the vast difference between providing support for vulnerable children as opposed to any potential overreach into what parents determine is best for their children,” wrote the commissioner.

Tennessee receives nearly 140,000 child abuse hotline calls a year, according to the last federal Child Maltreatment report.

“You might think that Tennessee authorities have enough work to do to keep up with the calls that claim a child faces an actual danger at home,” Diane Redleaf, co-chair of United Family Advocates and Let Grow’s legal consultant, tells Reason.

But the bigger problem, she says, is that “surveillance isn’t the support families need.” While the idea was to make sure families weren’t lacking food, shelter, or healthcare, a home visit from the government can too easily heighten tensions, mistake poverty for neglect, and possibly separate children from their parents. Even cases that are ultimately dismissed can be traumatic.

Now, as Tennessee reflects upon its overreach, perhaps the Department of Children and Families in Massachusetts could do the same. As Robby Soave reported on Monday, the DCF has the power to remove children who are being abused—as it should—but it “considers distance-learning no-shows to be possible abuse cases.”

That’s right: a kid who misses Zoom lessons could earn his parents a visit from child services. One mom even got a call from DCF because an adult male had allegedly exposed himself in front of her daughter’s virtual class—except the “adult male” was actually the girl’s autistic six-year-old brother. Rather than apologizing for the mistake and dropping the case, the school district notified the police anyway, The Boston Globe reported.

That’s why you don’t want government evaluators knocking on every door just because they can. The chances for overreaction and obtuseness are just too great.

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Here’s some good news for politicians fretting about how much of America’s pharmaceutical drug supply comes from China: Most of it doesn’t.

In fact, the majority of active pharmaceutical ingredients (APIs) consumed by Americans were produced right here in the United States, according to a recent report from the health care consulting firm Avalere. When it comes to foreign supply chains, about 19 percent of the active ingredients used in America’s drugs come from Ireland. China accounts for just 6 percent.

That’s a far cry from what you might have heard from some members of Congress, from the Trump administration, and from businesses looking to cash in on anti-China sentiment. Many of them have cited a widespread and misleading statistic to falsely claim that 80 percent of America’s drug supply is imported from China. Leading conservatives such as Sen. Josh Hawley (R–Mo.) have called America’s supposed dependence on Chinese-made drugs “inexcusable.” And the White House has authorized a $765 million loan to Eastman Kodak as part of a bizarre scheme aimed at “bringing pharmaceutical manufacturing back to the United States,” as President Donald Trump put it last month.

Through it all, little actual evidence has suggested that there’s a good reason to panic over America’s pharmaceutical supply chains. The most acute worry—that China would decide to cut off drug exports to the United States in the middle of the COVID-19 pandemic—has proven unfounded.

More generally, trade data suggest that America’s pharmaceutical supply chains are robust and diverse. Of the nearly 2,000 manufacturing facilities around the world that are approved by the Food and Drug Administration (FDA) to provide pharmaceutical drugs to the United States, only 230 are in China. There are 510 in the United States and 1,048 in the rest of the world.

The United States imported more than $115 billion of finished pharmaceutical products in 2018, the most recent year for which the United Nations’ COMTRADE database of world trade flows has complete data. Only $1.5 billion of that total came from China.

The Avalere report, which looked at APIs—the building blocks of finished pharmaceutical products—comes to a similar conclusion. China is the third largest provider of APIs to the United States, but “no single foreign country dominates the overall supply of API for the U.S. market.”

“This report is another piece of evidence suggesting we’re not wholly dependent on imports from China for finished pharmaceuticals and APIs,” says Clark Packard, a trade policy counsel at the pro-market R Street Institute. “The key is we need more data and evidence before we radically remake this market, but unfortunately policymakers don’t seem interested in a rational approach to this issue.”

Indeed not. After heavy lobbying by Eastman Kodak, the Trump administration agreed to give the bankrupt camera company a massive loan for the purposes of producing API domestically.

The Kodak deal came just weeks after the White House handed out a $350 million contract to a relatively unknown Virginia-based pharmaceutical company, Phlow Corp., to compete with drugmakers in China. That deal happened despite the fact that Phlow Corp. doesn’t have any history of mass-producing pharmaceutical drugs. Indeed, it appears to have been founded this year to cash in on Trump’s protectionist politics. A Phlow spokesman told BioPharma Dive, a trade publication, that the company’s leaders had been “communicating with government officials about the U.S. pharmaceutical supply for more than a year” and that Phlow’s “stated mission” is “reducing the U.S.’ dependence on foreign supply chains.” And one of the company’s board members has been making the rounds in media and congressional committee hearings to talk-up America’s supposedly dangerous over-reliance on Chinese drugs.

Before risking hundreds of millions of taxpayer dollars on loans to companies with unproven track records of producing pharmaceutical drugs or their chemical components, you might expect the White House to assess the seriousness of the underlying problem it is hoping to solve. But so far, all the available evidence suggests that China is not responsible for making most—or even much—of America’s pharmaceutical drug supply. Lobbyists and politicians are using a manufactured crisis to advance their own interests.

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I wrote about this case, which also involves what strikes me as an unconstitutional order forbidding defendants from naming the officer in the future, here (when the case seemed to be entirely sealed), here (as to the prior restraint), and here (as to pseudonymity and the remaining sealed document). The Enquirer (Cameron Knight) has more.

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