Pun Salad

No, I'm not jumping the gun. I'm joining with Janet Bufton at Econlib to hit this anniversary right on the nose: Happy Birthday, Wealth of Nations.

Janet's examples are part of the Liberty Fund's slick website, Adam Smith Works. A font of wisdom and trivia. For example, you might think that Adam was fond of Scotch Whiskey. But no, he preferred clarets (in moderation). Which probably gave him insight into British trade with France.

Also of note:

• Let's beat up on this stupid, evil idea some more. Megan McArdle looks at The myth of the billionaire wealth tax. (WaPo gifted link)

  Unfortunately, there are serious arguments that a wealth tax would be unconstitutional. Even more unfortunately, wealth taxes have been tried over and over, and most countries that adopted them eventually abandoned the idea, finding that such taxes were difficult to administer, caused capital flight and raised little revenue. An analysis by University of Toronto economist Joseph Steinberg suggests that tax revenue would actually fall if the Sanders-Khanna proposal were enacted, because of increased incentives for tax evasion (as taxes rise, people become more willing to risk the penalties for evasion) and reduced economic output.

  But what would Adam Smith say? See: Adam Smith on Taxation

• Not just stupid? The WSJ editorialists weigh in: The Legal Case Against Section 122 Tariffs. (WSJ gifted link)

  We never expected to see progressives quote Milton Friedman. But lo, 22 Democratic Attorneys General on Thursday invoked the free-market sage in a lawsuit challenging President Trump’s new Section 122 tariffs. They have a strong case.

  Mr. Trump last month turned to Section 122 to reimpose his border taxes after the Supreme Court struck down his emergency tariffs. Section 122 lets him impose tariffs as high as 15% for up to 150 days to address “large and serious balance-of-payments deficits.” Mr. Trump says the tariffs are needed to reduce the U.S.’s $1.2 trillion trade deficit in goods.

  Let's skip down to the delicious irony:

  Richard Nixon made Section 122 obsolete when he shut the gold window and abandoned Bretton Woods. The lawsuit quotes the sainted Friedman: “[A] system of floating exchange rates completely eliminates the balance-of-payments problem . . . the price may fluctuate but there cannot be a deficit or a surplus threatening an exchange crisis.”

  And on this day, you might also check out Adam Smith's Warnings about Exceptions to Free Trade.

• 

  Happy dolphins probably not included. The cover story in the current issue of Reason is by Christian Britschgi, who writes on The Joys of Data Centers. Joy is needed more than ever these days, right?

  Sen. Bernie Sanders has a problem with data centers. They're just too good.

  In a video posted to social media in December 2025, the Vermont independent complained that billionaire tech moguls are reaping huge profits from their data center investments while the technological innovations these facilities power will automate away countless jobs currently done by human workers. He called for a federal moratorium on data center construction to "give democracy a chance to catch up with the transformative changes that we are witnessing."

  I imagine there were early 20th-century Bernies demanding a moratorium on Henry Ford's Model T factory. But…

  In Sanders' case, his complaints about data centers tacitly accept the premises of the people investing huge sums in them: that these facilities will be fabulously profitable investments that spur the development of the innovative, labor-saving technologies of the future. But the socialist senator thinks that's a bad thing. After all, no government bureaucrat has precisely planned where all this economic dynamism will take us.

  The rest of us should be able to see the tremendous upsides of the country's data center boom. Advances in artificial intelligence and robotics could liberate humanity from boring, backbreaking labor. The early profits of data center development are a leading indicator of the increasingly productive economy that awaits us in the years to come.

  And although I'm relatively sure Adam Smith never wrote specifically about AI data centers, who can doubt that they are the pin factories of today?

Recently on the book blog: