Debunking the Myths: Don Boudreaux on Trade, Tariffs, and the Triumph of Economic Freedom

Summary

Episode Summary: Debunking the Myths: Don Boudreaux on Trade, Tariffs, and the Triumph of Economic Freedom

Podcast: Going Big! with Kevin Gentry
Host: Kevin Gentry
Guest: Professor Don Boudreau
Release Date: May 12, 2025
Episode Title: Debunking the Myths: Don Boudreaux on Trade, Tariffs, and the Triumph of Economic Freedom

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Introduction

In this insightful episode of Going Big! with Kevin Gentry, host Kevin Gentry welcomes Professor Don Boudreaux, a distinguished economist from George Mason University. The discussion centers on international trade, free trade versus protective tariffs, and the broader implications for economic freedom and national prosperity. Professor Boudreaux brings his extensive expertise to dismantle prevalent myths surrounding trade deficits and tariffs, offering a clear-eyed analysis grounded in economic theory and empirical data.

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The Benefits of Free Trade

Unobstructed International Trade Enhances Prosperity

At [04:49], Professor Boudreaux emphasizes the pivotal role of free trade in fostering economic growth. He states:

"Economic growth comes from ideas, from human creativity... if we cut ourselves off with trade barriers from the rest of the world, we're cutting ourselves off from 96% of human creativity."

He elaborates that the United States, despite its large population, benefits immensely from engaging with a vast pool of global creativity and resources. Boudreaux cites historical precedents, such as Britain’s embrace of free trade in the 19th century, which significantly contributed to its status as the world's richest nation at the time.

Importance of Trade for National Prosperity

Continuing the discussion, at [07:09], Boudreaux underscores how trade is crucial for both large and small nations. He draws parallels between the U.S. and smaller economies like Singapore and Hong Kong, noting that open trade policies are fundamental to their prosperity. He further asserts:

"When a nation embraces free trade, that's usually part of a package of embracing free markets generally."

This symbiotic relationship between free trade and free markets is depicted as a cornerstone of sustained economic growth and higher per capita incomes.

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Addressing Common Myths About Trade and Economic Health

Trade Deficits Explained

At [22:43], Boudreaux differentiates between federal budget deficits and trade deficits, clarifying a common misconception:

"I think the trade deficit... is a completely different thing, and it's not even a deficit at all properly considered."

He explains that a trade deficit indicates an excess of imports over exports but does not inherently signify economic weakness. Drawing from over five decades of data since 1976, Boudreaux argues that despite continuous trade deficits, the American economy has not suffered in terms of overall prosperity, aligning this trend with rising productivity and wages.

Impact of Free Trade on Manufacturing Jobs

During the conversation at [15:13], Boudreaux addresses concerns about the decline of manufacturing jobs in the U.S., attributing it to technological advancements rather than trade barriers:

"The decline in the portion of workers in manufacturing jobs is mostly due to labor-saving technology."

He notes that manufacturing output in the U.S. remains near an all-time high, and the reduction in manufacturing employment is a global phenomenon driven by increased automation and efficiency, not merely by offshoring.

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The Role of Tariffs and Their Consequences

Protective Tariffs Undermining Consumers

At [43:52], Professor Boudreaux delves into the ramifications of protective tariffs:

"Protective tariffs work by keeping goods and services out of the American economy... specifically by taxing you and me as American consumers."

He explains that such tariffs lead to higher prices for consumers, reduced access to goods, and diminished incentives for domestic producers to innovate or improve efficiency.

Effect on Domestic Competition and Innovation

Boudreaux cites the automotive industry as a case study, highlighting how competition from Japanese manufacturers in the 1970s spurred American automakers to enhance quality and innovation:

"General Motors, Ford, Chrysler had no choice but to up their game and improve their product."

This example illustrates how competition, rather than protectionism, drives industries to excel and adapt, ultimately benefiting consumers and the economy at large.

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Federal Reserve, Interest Rates, and Trade

Separating Monetary Policy from Trade Policy

At [33:43], the discussion shifts to the Federal Reserve's role in managing the economy independently of trade policies. Boudreaux emphasizes that:

"The Fed should not really pay that much attention to [trade]. The Fed should focus on keeping the money supply stable."

He warns against political interference in monetary policy, citing President Trump's attempt to influence the Fed to lower interest rates in response to economic challenges from tariffs as a detrimental move that could lead to inflation.

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Consumer Benefits from Free Trade

Lower Prices and Increased Abundance

At [38:37], Boudreaux addresses the consumer perspective, asserting:

"Everyone likes lower prices. Everyone likes greater abundance. The economy, the very meaning of economic growth... is about getting more goods and services for the same or less effort."

He refutes the notion that cheaper imported goods harm the economy, instead highlighting how they enhance consumers' purchasing power and quality of life.

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Insights from Professor Don Boudreaux

Book Release: "The Triumph of Economic Freedom"

Towards the end of the episode, Boudreaux introduces his forthcoming book co-authored with former Senator Phil Graham. The book aims to debunk seven major myths about American capitalism, covering topics from the Industrial Revolution to the Great Depression and the Great Recession. He emphasizes the book's accessibility for general audiences and its foundation in empirical evidence and sound economic theory.

Advice for Aspiring Economists and Changemakers

In response to a listener question, Boudreaux offers heartfelt advice:

"When you find something that you love, then just embrace it and do it... don't let your setbacks... stop you from doing your chosen course."

He underscores the importance of perseverance, openness to criticism, and continuous self-improvement as keys to personal and professional growth.

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Conclusion

Professor Don Boudreaux provides a compelling defense of free trade and economic freedom, systematically debunking myths that suggest trade deficits and protective tariffs are detrimental to the American economy. His analysis underscores the importance of embracing free markets to harness global creativity, drive innovation, and enhance consumer well-being. The episode serves as an enlightening resource for listeners seeking to understand the intricate dynamics of international trade and its profound impact on national prosperity.

For those interested in delving deeper into these topics, Boudreaux's book, "The Triumph of Economic Freedom: Debunking the Seven Great Myths of American Capitalism," is a recommended read. Additionally, listeners can explore his writings on his blog, Cafe Hayek, and follow his contributions to economic discourse.

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Notable Quotes:

• Don Boudreaux [00:31]:

  "If your audience doesn't follow what you're saying, then the problem's not with them, it's with you."

• Don Boudreaux [04:49]:

  "Economic growth comes from ideas, from human creativity... if we cut ourselves off with trade barriers from the rest of the world, we're cutting ourselves off from 96% of human creativity."

• Don Boudreaux [22:43]:

  "I think the trade deficit... is a completely different thing, and it's not even a deficit at all properly considered."

• Don Boudreaux [43:52]:

  "Protective tariffs work by keeping goods and services out of the American economy... specifically by taxing you and me as American consumers."

• Don Boudreaux [38:37]:

  "Everyone likes lower prices. Everyone likes greater abundance. The economy, the very meaning of economic growth... is about getting more goods and services for the same or less effort."

• Don Boudreaux [70:53]:

  "If you keep at it, you get better at it. And, and, and don't let your setbacks... stop you from doing your chosen course."

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This summary provides an overview of the key discussions and insights shared by Professor Don Boudreaux during the episode, offering valuable perspectives on international trade, economic policy, and personal growth within the realm of economic freedom.

Transcript

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[Don Boudreau]

Very early on in my career, I think when I was a graduate student, impressed upon I think I probably had that reaction, oh, how dare you criticize me? Said look, look, if you're a reader and if your audience doesn't follow what you're saying, then the problem's not with them, it's with you. And I realize that's true. And so I made a point. And it's hard, but I made a point to whenever someone criticizes something I do, I mostly write a talk. I made a point, ok, they're correct and I'm wrong. I did something wrong. I should not resist that assessment. I should embrace it and use it to improve myself for the future. And so I think I've gotten a little bit better gradually moving away from being highly imperfect to being less imperfect over time. That's. That's how you, that's the only way you can improve yourself. If you, if you, if you do anything thinking that somehow you're the master, you have achieved the pinnacle of perfection, then you're going to be as far away from perfection as is humanly possible. Because you're not. You're not going to learn anything, and you're not going to improve yourself.

[Kevin Gentry]

Welcome to the Going Big Podcast. I'm your host, Kevin Gentry, and this is the place where we celebrate bold moves and big ideas. Each week, I sit down with inspiring leaders, entrepreneurs and change makers who are making a significant impact in their careers and in their communities. Whether you're looking to level up your leadership, pursue your passion, or just get inspired to take your next big leap, this is where those stories come to light. Now, if you're listening on iTunes, YouTube, or anywhere else you tune into podcasts, be sure to hit that subscribe button so you'll never miss an episode. Now let's dive in to what it means to truly go big. Welcome, ladies and gentlemen, to another episode of the Going Big Podcast. Today we have someone as our guest who has not only gone big in multiple ways in his professional life, but on a matter, a subject matter that is of extraordinary interest today around the world and that is related to free trade tariffs, international trade. Professor Donald Boudreau. Don Boudreau has served as the chairman of the world class Economics Department at George Mason University. What I would argue is one of the most important and consequential economics departments in the world. He has served as the president of the foundation for Economic Education, fee the director of the center for the Study of Public Choice. He is a prolific writer. You've seen his articles, his op EDS books everywhere. He's lectured all over the world. And very importantly, he has a new book that's being just released in May with former senator, former United States Senator Phil Graham. Great new book, the Triumph of American Debunking the Seven Myths of American Capitalism. And certainly a big part of that is this current debate about trade and tariffs. So Don, I think you're one of the most influential voices on the subject of trade and free exchange. I know you have a license plate on your car, personalized license tag that says free trade. You've never cut me off in traffic, but I've seen you many times and it's a great reminder of why you are so dedicated to this subject. But I also noted on the official bio for you at the Department of Economics at George Mason, you talk about right up front how your mission is to be a clear communicator about economic ideas. And so, so glad to have you. You are very, very good at that. So I want to start off in terms of a going big question. And that is why is it that international trade, unobstructed by tariffs and constraints is enables everyone to go big? If you would make the case that for why trade is such a good thing.

[Don Boudreau]

The United States is a big country, population wise. We have 345 million people, I think, and yet we're only 4% of the world's population. Economic growth, ultimately, we know this now, it's not determined ultimately by how much oil you have in the ground or magnesium or iron ore. Economic growth comes from ideas, from human creativity. And even though the United States has a lot of entrepreneurs, again, we're only 4% of the human population. And so if we cut ourselves off with trade barriers from the rest of the world, we're cutting ourselves off from 96% of human creativity. And there's no way that that can improve our prosperity. It would reduce it. And the United States is a big country. So it's true. For the US Is true in a larger degree for smaller countries, which is why smaller countries, Hong Kong, Singapore, they understand because they're so small, they really do need to trade freely. And so not only, not only are there resources and raw materials and capital goods available elsewhere in the world. That's important. The most important thing is human creativity. We want to have access to is many good ideas as possible, as much competition as possible. And 96% of that is located outside of America's borders. And so if we cut ourselves off from that, we go small. And that makes us much less prosperous than we would otherwise be by being open to the ideas and competition and resources from all over the world.

[Kevin Gentry]

Well, ladies and gentlemen, you can see why having Don Boudreaux on here for this conversation is well chosen and timely. Don, I want to dig into more aspects of this and then I want to help, I want you to help us debunk some of the myths that seem to be prevalent right now as well. But just from a historical standpoint, you touched on this, but I think about Great Britain, small island country, the Netherlands you mentioned, you know, in current times, small places like Singapore and Hong Kong. How important is trade to the prosperity of a nation?

[Don Boudreau]

Well, again, it depends on Kevin, depends on the size of the nation. The smaller the nation, the more important in any absolute sense. The ultimate smallness is a household. So you know, you and Ann, any household, for example, there's no way you could, you could have anywhere close to the riches that you regularly enjoy and take for granted if you didn't trade with people outside of your household. A country such as the US if we cut ourselves off completely, we wouldn't starve. We wouldn't go back to living middle Ages lifestyle. We'd be much poorer, much poorer. And so the, the again, I'll just repeat what I said earlier. As, as large a nation as we are, both geographically and population wise, we're a tiny fraction of the na of the world's population. And so to be open to human creativity and the resources that are spread out around the globe is necessary if we're going to be as prosperous as we can be. And so you mentioned Britain. Britain of course is very famous for being the first major nation to fully embrace free trade. Starting in the middle 19th century, Britain largely got rid of all protective tariffs. It had some tariffs for raising revenue, but no, no protection. And Britain became the world's richest nation in no small part because of its free trade. Now free trade, we just end this one. My thought with this one Point when a nation embraces free trade, that's usually part of a package of embracing free markets generally. And so free markets are important. And so they come together. Economic historians and econometricians can tease out, well, how much of Great Britain's growth in the 19th century was due to free trade and how much was it due to internal freedom of the economy. There's no. They come together, but there's no doubt that we, in historical evidence, and this is overwhelming, that the freer is a nation to trade, the faster is its economic growth, and the higher are the per capita incomes in those nations.

[Kevin Gentry]

All right, well, help us wrap our heads around this a little bit more. And by the way, you made a reference, and I don't know whether you remember, but a few years ago, there was one of the Marvel superhero movies, Black Panther, and there was the fictional country in Africa called Wakanda, which was cut off from the rest of the world, but it was the most prosperous country in the world, which obviously was eternally inconsistent because they didn't trade with anybody. It made, made no sense. But of course, it was Hollywood. But help us understand, in the last 70 or so years for the United States, what effect has our trade around the world driven our prosperity for all Americans?

[Don Boudreau]

So if you look at the data, all sorts of data that can be looked at, but let's look at real per capita income, the total amount we produce adjusted for inflation per person, real inflation adjusted net worth of households, the affordability of various consumer goods, all of those things contrary to a narrative that has been around for a while, all of those things are much higher today, not only than they were at the end of World War II. No one really doubts that Americans are a lot richer than they were in 1947, 1948, 1950. American's wealth grew between the end of World War II and the mid-70s, but it continued to grow after the mid-1970s. People will say now, oh, well, we did okay in the 30 years following World War II, but boy, when, you know, the world recovered from World War II and then we started to suffer. We didn't suffer. What happened in America is that as other countries recovered from the war, and then a decade or two later, as many other countries escaped the horror of, of communism, both the Soviet style and, and Mao style in China, those countries began also to grow. We reaped some of the benefits of that because we traded with those countries that recovered with especially China. They grew relative to us. But that doesn't, that doesn't mean we shrink. You Know when a parent has a, has a child, as the child grows, the child grows relative to the parent, but the parent doesn't think, oh my gosh, my child is growing. I must be shrinking. But people have mistaken the relative growth of manufacturing, of exporting, the relative growth of many economic factors in other countries as for being the demise, the absolute demise of the American economy. And nothing could be further from your truth. You show me an economic variable that plausibly measures living standards, whether it be measured in monetary income, whether it be measured in access to goods and services, whether it be measured in real wages, and I will show you a trend over not just the past 80 years, but even over the past 50 or past 30 years of increasing American prosperity. It is simply false to say what most people today say about trade, that our industrial capacity has been hollowed out, that we don't make things anymore, that we don't export things anymore, that our trade deficit is draining us a wealth. These things are said constantly. They are simply untrue.

[Kevin Gentry]

All right, well, let's, let's dive into that a little bit more because there's something going on. Why somehow people are susceptible to these crazy arguments. I mean, you and I know from a very rational standpoint that it's wrong, but yet people believe it. So let's, let's, let's go through a couple of these points. So the Rust Belt in the United States, you know, this image of just the manufacturing powerhouses of Michigan and Ohio and Pennsylvania and Indiana and Illinois somehow hollowed out by free trade, and that is jobs moved overseas. And it left this, this core industry behind. And we have this nostalgic view, by the way. So there are always two particular points of this nostalgic view that we're going to return to this point of the 50s and 60s, when the rest of the world was recovering from World War II, and somehow go back to that time. But, but help folks understand what has shifted, what has changed and why it has changed, whether it's productivity, whether it's the changing in markets and tastes and attit dudes, help us understand that.

[Don Boudreau]

There's so much to say. And if I ramble on too long, don't hesitate to cut, to cut me off. So if you take the basic claim. Well, let me start with this. No economist of any sort, free market or any sort has ever denied that economic change causes the incomes of some people sometimes to fall relative to those of others. And same is true for, for regions, economic change is always occurring. We have a very dynamic economy. The Only way you get economic growth is if you have economic change.

[Kevin Gentry]

And by the way, if I could jump in on that, because I have a personal story about this that my family used to tell me. I had a relative who worked for the Richmond, Virginia Ice Company at the time of the advent of refrigeration. And he argued vociferously that refrigeration was just a fad and that any family member who bought a refrigerator he just wouldn't speak to because it was going to harm his ability to continue with the Richmond Ice Company. We all know that's laughable today, but yet it's a perfect illustration of this.

[Don Boudreau]

And it's understandable from his standpoint, right? Here's a man, he's making, he made his living, honest, dignified worker, supplying ice, and suddenly refrigeration comes along and no one needs ice anymore. One of my favorite examples that I use when I lecture is I show A picture of Dr. Jonas Salk giving a vaccination shot to a young girl. You know, if it's from the mid-1950s. And Kevin, you and I are in the first generation really, of children who were vaccinated, whose parents never had to worry about their children coming down with that horrible disease. And I say, think about all the jobs that Dr. Jonas Salk and Dr. Sabin destroyed. People who were employed making leg braces and wheelchairs and crutches and iron lung machines. That's just one example. But it's a. You know, we live in an economy with huge amounts of churn. So. So let me go back to your original question. If it were true that, that the loss of manufacturing jobs in America was due to the offshoring of manufacturing, then we would see manufacturing in America at its falling consistently. We would see industrial output in America falling. Well, we don't. We see a decline in the portion of jobs devoted to manufacturing going on. That decline, by the way, began in the mid-1950s. In a way, it began even before, if you count the people employed in manufacturing during World War II. But to be fair, it peaked in around 1953. And the share of employment in America devoted to manufacturing has come down steadily ever since from about 32% of the workforce. Today, it's about 3, excuse me, it's about 8, 8% of the workforce. And the trend hasn't changed. If anything has slowed down a bit in the past few years, but manufacturing output has gone up. Today it's near an all time high. It hit an all time high just a few years ago, dipped a little bit with the Great Recession and then with the pandemic, it's near an all time high now. And so manufacturing jobs have declined. So that's one reason people look at the portion of workers in manufacturing jobs and they say, oh my gosh, we don't make things anymore. We do make things. We make a lot of things. We are the second largest manufacturing nation in the world behind China. On a per capita basis, we are the largest manufacturing nation in the world behind no one. So we make a lot of things. But mostly the reason these jobs have gone away in manufacturing is because of labor saving technology. As Phil Graham, my co author, loves to point out. It's a good and important point. What's happened in manufacturing over the past century or so is exactly what happened in agriculture a century or more before that. Go back to the early and mid part of the 19th century. Many Americans worked in agriculture. And then what happened? Well, agricultural technology improved. We had mechanical tractors, we had better fertilizers, we had better refrigeration came along to help store food longer. So we needed fewer people working on farms. But Americans still grow a lot. We have no problem eating. We're better fed today than we, we've ever been. But we have now about 1%, just over 1% of the US workforce working in manufacturing. And yet in the early 19th century it was about 80% of the workforce. And so, excuse me, in agriculture. And the same thing is happening. Agriculture has become mechanized. Work workers and agriculture, the portion went way down. Manufacturing has become mechanized, much more mechanized.

[Kevin Gentry]

Yeah, if I could jump in, you know, if you have the opportunity, if anybody has the opportunity to tour a manufacturing plant today, you're not going to see thousands and thousands of workers on an assembly line. You're going to see like a dozen who are working or managing these incredibly sophisticated machines and things. And those are contributing to these productivity gains. And we've all seen the videos and things of how harvesting equipment just gets better and better and more, more sophisticated agriculture. So you don't need people out there picking this, doing this backbreaking work to pick all these crops. Well, let me, let me jump to a different subject if I could. So we've got the productivity gains that, that really are, are addressing this issue that people bring up about quote, unquote, lost jobs. Those jobs move to other areas. Obviously, if you think about our advances in healthcare, our advances in technology and artificial intelligence, now even, you know, job shift different ways.

[Don Boudreau]

Now let's talk about real quickly.

[Kevin Gentry]

Yeah, please.

[Don Boudreau]

The, the decline in the portion of workers in manufacturing relative to services and, and. And other non manufacturing use. That's not just an American occurrence. That's happening even in China. It's happening worldwide.

[Kevin Gentry]

Right, great point.

[Don Boudreau]

Except in the poorest countries. You have to go to sub Saharan Africa to find countries in which the portion of workers are manufacturing employment is rising. So this is a worldwide phenomenon. Anyway, I'm sorry, I interrupted you.

[Kevin Gentry]

This is great. So sort of point one with respect to going big on the benefits of a free exchange is that the argument that somehow tariffs or protective tariffs will bring back manufacturing and manufacturing jobs is debunked on the point that because of the technological gains and productivity gains, that that's just not the case even separate from the other effects of the protective tariffs. But let's move to the next point. The next point is trade deficits. I mean, I remember going back to people like Lou Dobbs and others who even Paul Harvey would talk about. Our trade deficit is X or Y and it's getting worse. Let's pause on that just for a second and first talk about budget deficits. Federal budget deficits in spending which have contributed to a significant Internet federal budget debt. And that debt creates a lot of problems and risks. Explain if you would just briefly why spending deficits that contribute to debt are bad. And then we're going to pivot to the trade deficits are a different bird of a different feather and don't matter. Would you first explain again, make that distinction? Because it's used all the time. People like, yeah, well I got it. I can't spend more than I take in. So obviously trade deficits are bad. Make the distinction if you would.

[Don Boudreau]

So I'm a budget hawk. I think the federal government has been, the term I use is fiscally incontinent for far too long and it's getting worse. Government debt now is around $36 trillion. This is larger than America's annual GDP. This is not sustainable. At some point we will have to pay the piper.

[Kevin Gentry]

Isn't it true that the payments on the federal debt each year are now greater than America spends on its military and defense?

[Don Boudreau]

The interest payments themselves are so high and well, and they might get even higher. But let's put that question aside. So the budget deficit is a real problem and it's an actual deficit. It occurs, as you know, when the government spends more than it takes in. The government is no more magical than you are. If it spends more than it takes in, it has to get the additional sum from somewhere and that somewhere it can print the money which you can't do. But it can borrow the money, and it does that a lot. It refrains from printing too much because inflation would break out. And people don't like inflation. Voters don't like inflation. But it borrows the money. And, and about 80% is borrowed from fellow Americans. 70% borrowed from Americans, 30% borrowed from foreigners. It doesn't make any difference in my view. Where it's borrowed, it's borrowed, it's got to be repaid. That is a burden of taxation that is borne by your children. My children, grandchildren, great grandchildren. I think it's terrible the, the trade deficit. However, it's a, it's a, it's a completely different thing, and it's not even a deficit at all properly considered. What we mean by a trade deficit, what the term signifies, is an excess in the monetary value of a country's imports of goods and services during some time period, say a month or a year, over the amount of its exports and exports of what we sell to foreigners and imports of what we buy. America has run. I like pointing this out because if your viewers look at me, if they squint their eyes, they can tell that I'm no spring chicken. I graduated from high school in 1976, and so in 2023, I reached the official retirement age of 65. America began running annual trade deficits in 1976, and we've run an annual trade deficit every year since then. So we've run an annual trade deficit my entire adult life. If they really were, if these were events that were going to impoverish us, we would have seen it in the data already. But they don't. What happens with the trade deficit? I have to get calmed down because I get really agitated.

[Kevin Gentry]

Let's even just, just put a finer point on this, you know, okay, if, if, if people in the United States purchase more goods from India or Vietnam or Australia or Chile, then the citizens of those countries buy from us. Why does that matter?

[Don Boudreau]

So people think it matters because they think, oh, well, it's called a deficit. And this is the problem with the language. Oh, well, that must mean we're borrowing from foreigners. And this is a typical interpretation. If that were true, that would be bad. But we are not borrowing from farmers to take a, to take, to fund our consumption. Some of it is borrowed, by the way. The government borrows a lot of it. But what happens typically is we buy. Let's use a simple example. We buy a million dollars worth of stuff from Europe. So we get a million dollars worth of French wine. The Europeans have 1 million portraits of George Washington, monochrome portraits of George Washington. Now, Europeans are just like you. They don't accept these monochrome portraits of George Washington because they're fond of George Washington. They accept them because they can do with them exactly what you can do with them and nothing more, nothing less. You can use them to buy American made goods or you can use them to invest in America.

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[Don Boudreau]

If the Europeans use them all to buy a million dollars worth of American exports, say American lumber, well, there's no trade deficit and the protectionists go, phew, escape that one. But the Europeans are just like you and me. They said, you know what? America is a good place to invest. In order to invest in America, I need dollars. If I spend all my dollars buying American exports, I'll have no dollars remaining to use to buy shares of stock on the New York Stock Exchange. I'll have no dollars left to go to Fairfax, Virginia, buy a piece of land and start a French restaurant. I'll have no dollars left to lend to General Motors that might need a loan to see itself through the month. And so, and I, now I'm a European, I think America is a good place to invest. So I'm not going to cash out all of my dollars buying American exports. I'm going to save some of them, ship them back to America and invest in dollar denominated assets. And so when we run trade deposits, when we Americans run trade deficits, that's first of all a signal that foreigners believe our economy to be an attractive place to invest, at least relative to other places in the world. Why we should be upset at that baffles me. It doesn't mean we're losing. It doesn't mean that Foreigners are cheating us any more than any place that you invest in is being cheated by you. It's a sign that we're trustworthy. Now, like all investors, foreigners can be wrong. But my gosh, it's been going on for 50 years now. And you look around, the United States looks pretty good to me. We're not a third world country by any means. The second thing to say is, when these dollars return to America as investments, that's bringing more capital into America. And so, just as any company would celebrate, if investors want to invest more in that company and do invest more in that company and those investments make that company stronger, the same is true for the United States. When we get a net inflow of capital from abroad, which is what happens whenever we run trade deficits, when we get that net inflow of capital from abroad, that means more machines, more factories. That means foreigners are helping us to bear the burden of our irresponsible federal government. I wish our federal government weren't irresponsible, but the foreigners who lend the government money aren't causing that irresponsibility. That irresponsibility is on the shoulders of the. Of the congressmen and congresswomen and the presidents who run those budget deficits. And so, at least, so far, at least, they're helping us bear that burden. Keeping interest rates lower, causing investments in the US to be higher. Those investments, when they grow, that improves American productivity. It improves the productivity of American workers. And when the productivity of American workers go up, so too do real wages go up. And this is what we see in the data. America's trade deficits rise, capital investment in America rises, productivity rises, and wages rise. That has been the story for the entire period of the past 50 now. 50? Yeah, 50 years, since 1975, since we last ran a trade deficit. Of course there are recessions and blips, but the trend has been upward. No concept in all of economics causes more confusion in the public policy debate than does the concept of the trade deficit. It sounds scary to most people because they don't know what it is. But in my view, I cheer when America runs higher trade deficits. You can tell, you can craft stories in which higher trade deficits might be a signal for something bad, but it's not the case in America. America runs trade deficits because America remains entrepreneurial. Its financial markets are sophisticated, property rights are secure, the courts are not corrupt. It's a great place to invest. So we should applaud that rather than thinking it's a problem that has to be solved.

[Kevin Gentry]

Well, you know, Don, I think it's as simple as, I mean, you're a trained and accomplished economist. If I wanted to improve my life by understanding economics better, and I wanted to pay you as a tutor to teach me so I can do better in business, in life, I'm not worse off for paying you for it, even though you may not have anything of mine that you want to buy.

[Don Boudreau]

That's, that's so.

[Kevin Gentry]

And, and we could just go on this on and on and on. And I agree with you. It's just, it sticks in people's minds that trade deficits are bad. All right, so another kind of technical question, and then I want to move on to the subject of tariffs. But, but first, what, what role does the Federal Reserve and interest rates play in this? Because certainly right now that's very much in the conversation as well. What role does that would do, what role does the, does the, the federal interest rate have in this discussion?

[Don Boudreau]

So I'm also a sound money kind of guy. I'm no great fan of the Fed. I think the Fed, especially even under Jerome Powell, I think it's been too loose with the money supply. But the Fed, again, everything is relative. This is one of the things you learn in economics. The Fed, given the American economy's strength and relative to most other central banks or many other central banks, the Fed has been responsible enough so that foreigners continue to want to hold US Dollars. They don't flee from US Dollars. That's a good thing for America. It's not a bad thing. It doesn't mean that, unlike what some people say, doesn't mean that the dollar is overvalued. The dollar is valued, however much it's valued. People want to hold dollars. People outside of America want to hold dollars and use those dollars for, to conduct foreign commerce. That's a good thing for us. The Fed, if it does its job, should make sure that the demand for money, as it's a technical term in economics, but you kind of figure out what it means that the demand for money is met by an adequate supply of dollars. It should not oversupply those dollars. That would cause inflation. If it were the case that a lot of dollars somehow left the economy and somehow disappeared down a giant sinkhole, never to be seen again, it would be appropriate for the Fed to restore the money supply to the degree that those dollars have left the economy. I believe that when the Fed increases the money supply too much in an effort to lower interest rates, that winds up being inflationary or potentially inflationary in the Long run. So with the connection with trade, I believe that the Fed should not really pay that much attention to it. The Fed should focus on keeping the money supply stable. And if it does its job, that's its job. That should be its job. If it does that, prices and interest rates will, as best as possible, reflect the underlying economic realities of scarcities, consumer demands, entrepreneurial and investment opportunities, and entrepreneurs, consumers, businesses will respond to these interest rates and prices in ways that enrich us as much as is humanly possible. It's interesting that President Trump, when the financial markets tanked following his tariff announcements, he then, we all know this famously now, he demanded that Jerome Powell and the Fed lower interest rates. In other words, goose up the money supply. And this is almost literally the President asking the Fed to paper over his mistake. When you increase the money supply, you can for a short time create the impression that things are better. Oh, got a lot more money. But if that increased money supply does not reflect increased actual output, then we're not made any richer by that. The ultimate result is going to be higher nominal prices, the inflation of the very same sort that enabled Donald Trump to get elected in 2024. But he thinks it would buy him at least short run political gain, but in the long run it would be harm, it would be harmful to us. So my view of the Fed is it should be slow and steady on the money supply, not respond to changes in trade policy, not respond to changes in patterns of international trade to keep the money supply stable, and then the economy will work as best as it possibly can.

[Kevin Gentry]

All right, one more question along these lines. Cheap goods. So these other countries that somehow produce things for less than American workers were producing them. Let's use a pair of jeans. Let's say that now a pair of jeans cost drastically less than they would have 10 years ago made by American producers in the United States. Why shouldn't we can be concerned about the importation of cheap goods? And actually rather being a little facetious, why shouldn't we be celebrating this? Because in fact, who is what Americans are being helped the most by the availability of less expensive goods.

[Don Boudreau]

That's a very good question. And whenever I'm asked it in one, ask that question, one form or the other, I say show me the person who likes walking into a supermarket and celebrates rising prices. Show me the person who goes into a shopping mall and celebrates rising prices. Show me the person who today goes on Amazon and celebrates higher prices. Everyone likes lower prices. Everyone likes greater abundance. The economies, the very meaning of economic growth. Is, or at least for me, the best possible meaning of economic growth is you get more and more goods and services that you value for you and your family for the same or less effort. We, we like to get pay raises. What does that mean other than that? That we get more in exchange for.

[Kevin Gentry]

Right.

[Don Boudreau]

The effort that we devote, people will express, as you allude to, people will express fear. Wow, we're getting these cheap goods from farmers. I've never heard an American expressed alarm when we learn about, say, new discoveries of oil in the United States or a new invention that makes the production of some food better, more efficient. We celebrate that. Wow, this is fantastic. But somehow, if foreigners are selling us cheaper things, we think that's bad. But if we sell ourselves cheaper things, we think that's good. And I don't understand the logic, because there is no logic behind it. We, we are enriched to the degree that we can. We have access to a greater amount of goods and services. This is an insight that goes back to Adam Smith, who said that very thing, said the wealth of the nation is not measured by how much gold it has in its coffers, how much money is circulating in the economy. The wealth of a nation is how able are its ordinary people, citizens, to buy goods and services that make their lives better. And as you, as foreigners come to trade more with us and are willing to sell us things at lower prices, the foreigners benefit because they're willing to do it. We benefit, too, because we're getting more for our money. And that's what economic growth is all about.

[Kevin Gentry]

Well, Don, a friend of mine who is a poultry producer explained to me that for as many as 50% of Americans, going to the grocery to store is very much of an economic choice and decision each time. And the price of protein, like chicken, if it goes up, may shift that buyer to say, I've got to move to beans or some other alternative. So if the cost of imported goods suddenly goes up, people who are making these tight choices are going to have to make choices and not be able to buy those things that they were able to buy previously. Which now brings me to the point about tariffs. Okay, so we've tried to address this conundrum that this thing that people, this bias that people have about trade deficits. And for some reason, President Trump seems very dead set on this notion that the United States is being ripped off if we buy more from a country than that country buys from us. Okay, we've said, I think you've done a good job addressing that. So his response that he's proposed is contrary to the general consensus that has existed for a long time. I mean, Ronald Reagan was a great free trade president, but there were many Democratic presidents who were free trade. There were free trade agreements that were negotiated, not just nafta, but among many other countries, there was like, continued effort to lower tariffs. In terms of going big, you've made the case that free exchange enables people to go big in terms of prosperity and gains. What will tariffs do? Will that make us go small? And what effects, in your view, will the imposition of tariffs have on the American people, the American economy, and the world economy?

[Don Boudreau]

So let's be clear. The tariffs we're talking about here are protective tariffs. The, the goal. So the, this, the talk you hear sometime about, well, we're going to use tariffs to replace the income tax. That's just not going to happen because there's no way you can raise the amount of revenue that the government now needs from tariffs. It just, it's mathematically impossible. Now, I would be delighted to go back to having a government the size of the one in the 19th century and fund it with tariff revenue, but that's not going to happen. And so we're talking about protective tariffs.

[Kevin Gentry]

Because, and to be clear, just to find protective tariff, if I, if I want to buy a car and that car cost me $20,000 from a country outside of America or cost me $30,000 made in the United States, essentially they're saying, let's put a $10,000 tariff on that car. So at a minimum, it's of equal value. So suddenly I can't buy the $20,000 car anymore. I've got to buy the $30,000 car either from overseas or internally.

[Don Boudreau]

Yeah, or keep your older car for longer. That's right. And so a protective tariff, what it protects are particular producers in the economy, domestic economy, from foreign competition. That fact itself should give you a hint at what's wrong with protective tariffs. You're protecting firms from competition. Firms protected from competition raise their prices. Firms protected from competition become less innovative. They wind up being less efficient at producing over time. They don't improve their productivity as much as they would under the pressure of competition. And so the wages paid to their workers over time actually do not rise as much as they would otherwise rise.

[Kevin Gentry]

And by the way, going back to the 1970s, when even there was a trade surplus, so to speak, we know that the automobile industry, so many others were, were dying in the United States because they were just. They weren't as good, they weren't innovating they weren't cutting edge. We wanted an alternative. The competition improved everything.

[Don Boudreau]

You and I remember the American made cars from the late 60s and early 70s.

[Kevin Gentry]

Oh, they were terrible.

[Don Boudreau]

They were terrible. And just 10 years later, a lot better. Because the Japanese were very aggressive in competing the American market. And General Motors, Ford, Chrysler, they had no choice but to up their game and improve their product, which they did. But anyway, so protective towers are designed to protect the domestic economy, and they protect the domestic economy by keeping goods and services out of the American economy. They do that specifically by taxing you and me as American consumers. Protective tariffs work their protection only insofar as they are a tax on us. And so because the whole purpose of the protective tariff is to make you pay more and me pay more for imported goods so that we're more likely to buy the domestically produced substitute. That's the goal of the protective tariff. And so the goal is to. Is to reduce our access, us being consumers, heads of households, our access to goods and services so that we pay higher prices. That's the goal. And. And it can achieve that goal. We pay higher prices.

[Kevin Gentry]

That's a great point. So to be clear, the goal of protective tariffs is going to force the American consumer to pay higher prices. And great illustration, by the way. Don, you want to speak to this? At least in the United States, we have a competition among states, right? And there are some states that don't have a sales tax or they don't have an income tax. So if I want to move to Florida or Texas or Tennessee or Wyoming and not pay an income tax. Wonderful. Right. There's a reason those states are growing. But we also know that there are states that have a sales tax or a lower one, etc. So if I live in Maryland, I'm going to go shop in Delaware, where I don't have to pay the same sales tax. If I live on the border between Washington and Oregon, I'm going to pick the state that has the lower sales tax. If essentially the idea behind this is, nope, every state has to raise their sales tax to an equal level because we don't want to punish the businesses in the other state. It's crazy. All it is is raising prices.

[Don Boudreau]

Yeah, well, you know, as you know, Kevin, one of the. One of the chief Reasons for the 1787 Philadelphia Constitutional Convention was indeed to prevent states from imposing trade restrictions on other states, which some states were doing. And the founding fathers were intelligent enough to realize that, wait a minute, that's going to reduce internal commerce, and that's going to make Americans poorer than. Otherwise we won't. Our tax base is going to be too low. We better stop this. And so that was one of the purposes of the Constitution, to turn America into a giant free trade zone, which it did very successfully. And the same logic applies. If, if it's true, and it is true that we in Virginia would be made poorer, if the Solons in Richmond had the ability to tax us with penalty taxes, if we buy things from Maryland or California and we would be made poorer, then the economic logic is the same. Now, when the solons in Washington, D.C. tax us in America, when we buy things from. From abroad, that makes us poorer. The whole point is to raise. The whole point is to increase scarcity in order that prices get raised in order that a certain handful of politically influential producers will make more money. You can make a handful of people richer by protecting them from competition. You cannot make an entire country richer by protecting the entire country from competition. You will inevitably make it poorer. And this shows up in the data over and over and over again over without any ambiguity whatsoever.

[Kevin Gentry]

Well, thank you, Don, for raising attention to this. And this is where I want to take us next in the conversation, and then we'll bring it to a close as well. But by the way, you just touched on something that made me remember a lot of what you do in the nature of being a free market economist. I remember in Virginia, the legislature politicians were going to force gas stations that had convenience stores that generally charged lower prices for the gas, but they couldn't do that because it was somehow harming the gas stations that were. That were charging higher prices. And you at least spoke up and said that this, this legislation is absurd, but it tracks along the same kind of mentality.

[Don Boudreau]

Yeah. Yeah. So actually, Kev, there were two things I was involved with. At one point in Virginia, there was an effort to limit the ability of gasoline stations to raise the price of gasoline. And I forget which order they occurred. Another occasion, there was an effort in Richmond to restrict the ability of gasoline stations to lower the price of gasoline. So some mom and pop gasoline station owners, they were upset when Sheets and Wawa moved in because Sheets and Wawa were underpricing them and said, we can't have this, we can't have this. And I remember going down to Richmond, this is, gosh, more than 20 years ago, going down to Richmond to say, no, wait a minute, this price competition is good. We do not want to protect smaller gasoline stations from competition. This is going to hurt most Virginians. And fortunately, that effort succeeded. We did not in Virginia restrict the ability of gasoline stations to lower their prices.

[Kevin Gentry]

Wow.

[Don Boudreau]

That would be, that would have been an example of a protectionist measure.

[Kevin Gentry]

Okay, so Don, I like you now to, we're going to shift now to your, to the book that you and Bill Graham are releasing. I want to urge people to read it. You'll do great stuff. This is an important read. We know already from this conversation. You've got a lot of great ideas that you articulate very well. Don, just in all these examples, the heart of this is individual consumers. A market is much smarter, is much better at making choices than any central planner could be ever. Right. I mean, isn't that at the heart of it? So somebody's saying this tariff needs to be this dollars and this and oh, wow, I made a mistake here. So let's shift this and, but, well, let's protect this market. Oh, I forgot about that market over there. We won't even get into the cronyism where lobbyists are getting in to prot. Their little slice of the pie. Is it the heart of this? What Tell us about your book.

[Don Boudreau]

So the point you make is the, the, the, the point. I, I think of it as Bastiat's Paris Gets Fed Point Frederick Bastiat, the great 19th century French economist and journalists.

[Kevin Gentry]

And statesman book the Law is a great book to read.

[Don Boudreau]

Everything the guy, the law, economic sophisms. What is that which is seen, that which is not seen. This is the English language title, wrote in French, but they're all translated. And Bastiat marveled that every day Paris gets fed. A city of enormous population, there's no central planner. But individuals on the ground respond to prices and profit opportunities and they make sure that people get fed and people take it for granted. You know, there's, of course there's going to be a croissant, of course there's going to be a baguette. Of course there's going to be, you know, a meal at a restaurant and food at the market. The book that Phil and I talk about this idea of the Paris gets Fed. The, the, the ingenuity of competitive markets to find opportunities and take advantage of. Of. Of. Of. Of opportunities to serve people better. Entrepreneurs to serve people better. But that runs throughout pretty much all of the economics that I do. The book, as you said, the title is the Triumph of Economic Freedom, but the subtitle refers to the actual specifics of what we do. We bust seven fallacies that are commonplace about the American economy, one of which we talked about in this podcast, a lot, namely trade, especially since the mid-1970s, has somehow worsened the American economy, economy. And we mustered lots of data and argument to show that that is just a complete fallacy. There's no true evidence, good evidence to back it up. But we, we talk about, we start with what we call the Genesis myth, and that is the myth that when capitalism began, both in Britain and then when the factories came to America, that the wealth of the capitalists was built by grinding into the dust the poor workers. And so we show that, no, no, no, in fact, ordinary workers, ordinary people, ordinary families were getting wealthy during the Industrial Revolution, both in, in Britain and in the United States. We have a chapter on the Great Depression on, on the, you know, the, you know, most American school children, of course, learned that. Well, in the 1930s, capitalism was shown to. To be largely a failure. And thank goodness Franklin Roosevelt wrote in with his New Deal to, to save Americans from the depredations of capitalism and to put in place various reforms that, that prevent capitalism from doing the damage that it did in the 1920s. So we bust several fallacies about what caused the Great Depression, bust several fallacies about what ended the Great Depression, and in all cases, showing that the free market was not to blame. And that the recovery from the Great Depression had actually very little to do with the New Deal. It had more to do with restoring the rule of law and restoring property rights and freedom of contract that, ironically, a lot of the New Deal policies try to undermine. We have a chapter on the Great Recession, you know, the 2008, 2009 recession. It was not caused by deregulation, wasn't caused by the greed of bankers seeking to lend money to people who couldn't pay back. Think of what a ridiculous narrative that is. I'm a banker. I got money. I want to lend it out. I want to. I'm going to try to lend it to people who I know won't be able to repay me. That is crazy. No one wants to do that. So we have a chapter on that. We have a chapter on regulation that the Progressive Era regulation that started in the early 20th century. Food inspection, antitrust, late 19th century. And then in that same chapter, we talk about the impetus that was behind the deregulation movement in the 1970s and 1980s. And we point out that the regulations that were imposed 100 or more years ago were not really the success story that many people suppose them to have been. And that the deregulation that occurred under Presidents Carter and Reagan were actually quite, quite successful. And to this day, we are reaping many of the fruits from that deregulation. We also have chapters on myths about inequality in America and myths about poverty in America. And so we aim the book at a general audience. Although Phil Graham and I are both professional economists, we didn't write it for our fellow economists per se. We wrote it to be accessible to any interested reader who wants to know about the, the, the. The history of the American economy. And as much as possible, we tried to let the facts speak for themselves. And I got to say on this, I'm very grateful to Phil Graham because I would often go off in writing on offering my own opinion. He was saying, no, Don, you gotta let the facts speak for themselves. And he held me to that, to that promise.

[Kevin Gentry]

Well, Phil Graham is awesome. And as you know, I had him on a podcast, a Going Big podcast, a few months ago, and he touched on some of these as well, and he spoke about this book. Remind us, what's the title?

[Don Boudreau]

The Triumph of Economic Freedom colonial debunking the seven great myths of American economic history. 99% right about the subtitle.

[Kevin Gentry]

All right, we'll look up Phil Graham and Don Pedro as well for your book. It's a great book and we're going to hear a lot more about it, I'm sure. So, Don, I just want to conclude with a little bit about you. In terms of going big, you are a very influential voice in economics. The George Mason Department of Economics is a very. A very influential place around the world. I know that there are going to be people who listen to this podcast around the world who are going to reach out to me and say, you know, tell me more about George Mason University. It always happens in this sort of thing. First of all, tell me about why is George Mason's Department of Economics so important with respect to going big for economic freedom and the triumph of American freedom?

[Don Boudreau]

Because we, for the past almost 50 years, and my late colleague, who you knew, Walter Williams, was very instrumental in this effort. We were not afraid to be relevant. We were not afraid to be open about our appreciation for the power of markets to enrich people and our suspicion, afraid to express our suspicion that government with too much power will not perform as promised. In fact, it'll make generally make things worse. So we were very open about that. We do very scholarly work. We've had two Nobel Prize winners on.

[Kevin Gentry]

Our faculty, James Buchanan and Vernon Smith. Extraordinary.

[Don Boudreau]

James Buchanan in 1986, Vernon Smith in 2002. Both very free market oriented economists. So our colleague, we do Top flight economic research. But unlike many departments, we don't, we don't waste our time doing puzzles, doing intellectual puzzles. You can do, you can waste a lot of time creating mathematical models and trying to figure out just how these mathematical models work under various circumstances. That has very little application to the real world. Unfortunately, a lot of that has gotten currency in economics also. We do a lot of empirical research, but we, we try to ground our empirical research in sound economic theory rather than have this naive notion that all we got to do is just gather a whole lot of data and then let the data speak for themselves. We realize that data never speak for themselves. Those are just numbers. In order for data to tell us anything useful about economic reality, those data have to be processed through and interpreted with sound economic theory. And also, here's another way in which we differ. We understand that basic economic reasoning, econ 101, goes a long way toward helping make even the most complex data more understandable. We know Econ999, we can do all that stuff. But there's no point in doing all that stuff if you can tell a story using Econ 101 reasoning. And Econ 101 reasoning is surprisingly powerful. I like to say that the problem with, to the economic problem with the world isn't due to the fact that too few people know Econ999. The problem is too few people know Econ101. They don't understand that you can't get more of this without giving up something of that. They don't understand the reality of unintended consequences. They don't understand the fact that prices set in competitive markets convey incentives and information about what to produce and what not to produce. These are basic things that any good Econ 101 student learns. And so we focus on that. And that for us has been a remarkable source of success. There's a hunger for it out there, indeed, among students and among the general public. When we, my colleagues and I, talk to the general public, we talk in plain English because we care about the real world. And we understand that, that, that, that it's not impressive to ordinary men and women to hear economists talk in jargon and equations just for the sake of impressing the audience about how much jargon and you know and how many equations you can spit out. And so we really, we care about economic reality reality, we care about policy. We understand that to have an impact on the real world, we have to be relevant. And to be relevant, we have to stick as much as we can to the basics in econ 101. And that's what we try to do and it has been a remarkable source of success for us. We get students from around the world who want to study with us at the graduate level and it's it. We are to this day, every one of my colleagues, we're excited to go to work because we just love love what we do. We love economics and, you know, hope we can do it for as long as we keep breathing.

[Kevin Gentry]

Well, I hope so too. Thanks for making economics clear and compelling. Thank you for your leadership role as well. Why did you decide to become an economist?

[Don Boudreau]

So this so thank you for that question. I love telling the story. I no one in my family had gone to college. My dad dropped out of school in sixth grade. He's a great man, but he worked as a pipe fitter in a shipyard and I was the oldest in my family and go to college for at least one one semester. Okay, I'll go to college. And then I had a job in the shipyard lined up. By the way, I remember Kevin, and I think I'm a little bit older than you, so you might not remember this, but I the first time I drove a car by myself was in the fall of 1973. My dad gave me the keys to the car. I was 15 years old. He said, go buy gasoline. The first time I drove a car by myself, I drove it to wait in line to buy gasoline. That was a 1973 gasoline shortage, and I didn't know why there was a gasoline shortage. I was 15 years old. We're running out of gas. Oil companies are greedy. I didn't think much of it. A few years later, I get just stuck by pure happenstance in an economics class taught by a wonderful teacher, a woman named Michelle Francois. She died a few years ago. Didn't publish a lot, but she was a great teacher and she said I was an Econ 101 class. She says, you remember waiting in line to buy gasoline? Of course we all did, because we all waited in line to buy gasoline. Here's why. And she showed a supply and demand curve. You waited in line to buy gasoline because the government had in place price controls on energy that created a shortage that meant that the amount of gasoline that people wanted to buy was greater than the amount that it was profitable for producers to produce. That's why you waited in line. If it had not been for the gasoline price controls or the energy price controls, you wouldn't have waited in line. That was the most beautiful intellectual thing I'd ever. I remember the day. I remember looking at that supply and demand graph thinking, oh, my gosh, the few lines on the chalkboard can make important economic reality so much more understandable. In the bargain, I got unintended consequences, incentives. By the end of that semester, I was hooked on economics. And by the end of my sophomore year, I knew I wanted to get a PhD in the subject. And I had the good fortune. I went to a school virtually no one's heard of as an undergraduate, Nichols State University in Thibodeau, Louisiana. I had the great good.

[Kevin Gentry]

Are you from Louisiana?

[Don Boudreau]

Born and raised in New Orleans.

[Kevin Gentry]

Thus the name Boudreau.

[Don Boudreau]

Thus the name. It's the Smith of South Louisiana.

[Kevin Gentry]

Yes, it is. Not Bordeaux, but Boudreau.

[Don Boudreau]

Yeah, but I've been called Bordeaux. I don't mind. I like French wine. Anyway, I had the good fortune to have had excellent teachers, people who were committed to the classroom, who taught economics soundly. They were interested in the real world. They got their students excited when they saw that I was a young man interested in these ideas. They would funnel books to me. They would endure me talking to them for hours in their office, which is what I like to do now with my students. When I find an interested student, I lend them books. Sometimes I buy them books. So I love talking to them about these ideas and. And giving them some guidance on what's possible to study and, you know, and how best to study and how best to pursue their interest in the subject. And. And it's just very gratifying. And. And I must say, one of my students who wrote his dissertation under me just two or three years ago, John Murphy. He's from Boston, he's from New England. John Murphy is now an assistant professor at Nicholls State University in Thibodeau, Louisiana. That's awesome. This makes me enormously. I'm proud of John. He's a great economist, he's a great teacher. And I'm. I'm very happy that I was to play some role in, you know, because the people that were there when I was there, they're either dead or retired. And so now we're restocking that economics department with. With. With equally committed and equally talented teachers. And we should do it just nationwide if we can.

[Kevin Gentry]

Well, we're glad you took that particular career path, Don. And it's funny you talk about the situation in the 70s, which we know want to go back to the 70s, but we had a lot of economically illiterate policymakers, including our presidents then, and I hope we can shake ourselves of this hopefully temporary situation where we have people making decisions that just don't understand how markets work and how people behave. But anyway, be that as it may. All right, last two questions. I always like to ask this question. Knowing what you now know about your life, what would you have told, what would you tell a younger version of yourself that you might have done differently?

[Don Boudreau]

Oh my gosh. What would I have told a younger version of myself? This might sound odd. I, I so much loved economics, Kevin, that I, I just, that's all I did. I would have told myself to take a break and, and, but you know, I'm not sure how serious I am about that because I, I, I have led one of the luckiest lives ever. I, I, I, I stumbled upon this subject that I love dearly. It's treated me well. I was able to make a living at doing it. So I, I would have, but I do think I would have told myself, you know, just take a break sometimes you don't have to do it 24 7. That's not a very, that's not a very good answer. I, I, I've just been so lucky that, you know, I have no major regrets in my life and, and I'm 66 years old now and, and I, I, I'm lucky at 66 to be able to say I've, I've just had no major regrets.

[Kevin Gentry]

Well, I love that you talk about finding the sort of meaning and purpose and happiness in your work, in your work life that you've done, and, and how that is so much the case throughout your department at George Mason University, the Economics Department. All right, well, last question, final question. That is the going big question for anyone listening around the world, wherever they may be. What advice would you have for them either from the standpoint of your being an economist, a trained economist, someone who believes in these principles, or just how you've lived your life. What advice would you give to how we might all think about going big?

[Don Boudreau]

So this is going to sound trite perhaps, but it's true. When you find something that you love, then just embrace it and do it. And don't be, don't be falsely modest. You know, I, I was, you know, I came from a working class family, went to Nicholls State University. I'm not a Nobel Prize caliber economist. I never thought I would ever be one, but I just kept working and not afraid to, to put myself out there. And you know, in the course of doing that, there were a lot of times when I, I got embarrassed. I wrote Stuff that, oh my gosh, how did I write that? I gave a talk and how did I do that? But you learn and you just keep at it. And if you keep at it, you get better at it. And, and, and don't let your setbacks, as everyone has setbacks, don't let those setbacks allow you to think, oh my gosh, I've chosen the wrong course. Even in the most ideal course, you're going to encounter setbacks, you're going to encounter bad days, you're going to encounter confusion, you're going to encounter doubts. But I knew from early on that I was meant to be an economist, particularly a teacher of basic economics. I just knew it from my late teens, early 20s. And I wasn't going to let anything stop me from doing that. And I just, just pressed on and, and let yourself be open to, also trite, let yourself be open to criticism. I've seen lots of young economists who get upset when they write a paper, whether it be a professional paper, whether it be an op ed for a newspaper, and they, they put it up for other people to read and they get back criticism and they resist it. And it's a natural human thing. Of course, you, you don't, you, you want to be able to show someone your paper must say, that's perfect. Yeah, nothing to do, nothing to change. And of course no one writes anything that's perfect. And, and, and someone, and I, I don't even recall now who it was, but someone very early on in my career, I think when I was a graduate student, impressed upon, I think I probably had that reaction, oh, how dare you criticize me? Said, look, look, look, if your reader, and if your audience doesn't follow what you're saying, then the problem's not with them, it's with you. And I realize that's true. And so I made a point, and it's hard, but I made a point to, whenever someone criticizes something I do, I mostly write a talk. I made a point saying, okay, they're correct, I'm wrong, I did something wrong, I should not resist that assessment. I should embrace it and use it to improve myself for the future. And so I think I've gotten a little bit better, gradually moving away from being highly imperfect to being less imperfect over time. But that's, that's how you, that's the only way you can improve yourself. If you, if you, if you do anything thinking that somehow you're the master, you have achieved the pinnacle of perfection, then you're going to be as Far away from perfection as is humanly possible, because you're not. You're not going to learn anything and you're not going to improve yourself.

[Kevin Gentry]

Well, thank you, Don. That's great advice. Well, perfection is impossible, but it's also boring, right? So this is. Well, well, thank you very much. All right, ladies and gentlemen, check out the George Mason University Department of Economics. Check out anything from Professor Don Boudreau. Don, you have this great. These letters to the editor that you put out about. Mostly about trade. How can somebody get on your list?

[Don Boudreau]

Oh, you can email me. Do you have my email address that you can share with. Put on you on your.

[Kevin Gentry]

Yeah, we'll put it. We'll put it on the. In the show notes. So, yeah, we'll do.

[Don Boudreau]

And also I post my letter. I have a blog that I started in 2004, actually, 21 years ago, almost to the day. It was April of 2004 with my former colleague Russ Roberts. And Russ no longer blogs. This is just mine. It's Cafe Hayek. And pretty much all of my letters go up on.

[Kevin Gentry]

There you go. So Cafe Hayek. Hayek. For Friedrich Hayek. H A Y E K. Check out. You gotta. You gotta get this book, the Triumph of American Freedom, Debunking the seven Great Myths of American Capitalism.

[Don Boudreau]

Economic liberty, I think. Yeah. Or economic freedom. Yeah.

[Kevin Gentry]

Yes. I think it's American freedom, but I could be wrong. But anyway, we'll find it through Don Boudreaux and Bill Graham. We'll put it in the show notes as well. Don Boudreau, it's great to have you and thank you for all that you're doing. Keep at it. We need your voice. We need you to keep speaking out.

[Don Boudreau]

Well, we need a lot of people, Kevin, but thank you for doing what, what, what you do and, and for your excellent podcast. I really enjoy them.

[Kevin Gentry]

Thanks for tuning in to the Going Big Podcast. I hope today's conversation left you feeling energized and ready to tackle your biggest goals. Don't forget to subscribe and leave us a review on iTunes, YouTube or wherever you listen to podcasts. It really helps spread the word and it gets these inspiring stories out to more people. You can also find more content, resources and updates at our website, goingbigpodcast.com Remember, the only limits are the ones you don't challenge, the limits that you impose on yourself. Keep pushing, keep growing, and above all, keep Going big. See you next time on the Going Big podcast.